AmEx to Limit Merchant Costs During Chip-Card Shift
June 22 2016 - 10:50AM
Dow Jones News
American Express Co. said it would limit the costs of fraudulent
credit-card transactions for U.S. retailers as they upgrade their
systems to begin accepting chip cards.
The move comes less than a week after Visa Inc. and MasterCard
Inc. said they would speed up the certification process of
chip-reading check-out terminals and limit costs to merchants
during the transition away from old cards with magnetic
stripes.
It also follows widespread complaints from merchants across the
country. As of last October, retailers that didn't make the
transition to chip cards have been on the hook for counterfeit
transactions that previously were covered by card-issuing banks.
The costs of the fraud, known in the industry as chargebacks, have
been starting to stack up.
Under its new policy, American Express said retailers wouldn't
be held responsible by the end of August for bad charges on card
transactions of less than $25. By year's end, the company plans to
hold merchants liable for a total of 10 bad charges per card
account, with costs for the remaining bad charges moving to the
card issuer."
"We recognize the migration to EMV in the U.S. is an effort that
will take time, which is why we are making these policy changes in
order to provide flexibility to those merchants that may need more
time to upgrade their point-of-sale terminals to accept EMV chip
cards," said Mike Matan, vice president of AmEx's global network
business.
American Express, which said 40% of its costs related to
credit-card fraud in the U.S. involve purchases of less than $25,
said the policy will stay in effect until April 2018.
Meanwhile, under the prior policy implemented in October, the
party with the least secure form of technology—either the retailer
or the card issuer—was responsible for the costs of card fraud.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 22, 2016 10:35 ET (14:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
American Express (NYSE:AXP)
Historical Stock Chart
From Feb 2024 to Mar 2024
American Express (NYSE:AXP)
Historical Stock Chart
From Mar 2023 to Mar 2024