Disputes - PIX MED

The Special Return Mechanism (Mecanismo Especial de Devolução, or MED) is a protocol within Brazil's Pix payment system designed to facilitate the reimbursement process for users who have fallen victim to fraud or operational errors. Implemented by the Central Bank of Brazil in November 2021, MED aims to increase the likelihood of victims recovering their funds by providing a structured and efficient procedure.

Key Features of MED:

• Eligibility: Users who have experienced fraud, scams, or crimes related to Pix transactions can initiate a refund request through MED. It's important to note that MED is not intended for commercial disputes or errors in entering Pix data.
• Timeframe: Victims must register their refund request with their financial institution within 80 days from the date of the Pix transaction.
• Process:
  1. Initiation: The victim contacts their bank to report the fraudulent transaction.
  2. Communication: The victim's bank notifies Tazapay’s bank partner through a system integrated with the Central Bank of Brazil.
  3. Analysis: Tazapay’s bank place a block on the funds during the investigation while it analyses the request. The bank has up to 7 calendar days to analyse the request and verify its legitimacy.
  4. Resolution: If the claim is accepted, the Pix amount is refunded to the victim. If not, the funds are unblocked. Once a decision has been reached, it cannot be contested or reversed. There is no arbitration mechanism.

The Pix MED process with Tazapay:

• Whenever Tazapay receives a Pix MED claim through it’s bank, Tazapay will promptly inform the merchant of the dispute
• The merchant is expected to provide as much information as possible to contest the case. Sample information which can be provided to contest the case include (not exhaustive):
  • All buyer details available (Name, Number, Email, CPF ID, IP address)
  • Communication with customer
  • Screen recordings of the buyer’s session
  • Previous purchase history (if applicable)
  • Proof of delivery / fulfillment
  • Customer Agreement or Terms of Service
• The merchants are expected to share the information within 1 business day to provide the maximum possible time to the bank to investigate, and adjudicate in the favour of the recipient.
• If the Pix MED case if lost, Tazapay will create an adjustment indicating the transaction ID.

While MED provides a structured approach to addressing fraud within the Pix system, its effectiveness depends on prompt reporting by victims and prompt provision of necessary evidence by merchants.

REFERECE - https://www.bcb.gov.br/en/financialstability/pixfaqen