American Express To Update U.S. Fraud Policies To Limit EMV Chargebacks for Merchants
June 22 2016 - 9:00AM
Business Wire
Policy Changes Aim to Reduce Fraud Costs for
Merchants While Promoting Further Adoption of EMV
In an effort to promote further adoption of EMV in the U.S.,
American Express (NYSE: AXP) today announced changes to its EMV
chargeback policy to help merchants limit their fraud costs as they
upgrade their point-of-sale systems. By the end of August 2016,
merchants will not be held liable for chargebacks for counterfeit
fraud when a transaction is under $25. In addition, by the end of
2016 American Express also plans to limit the number of counterfeit
fraud chargebacks to a total of 10 per card account. The card
issuer – not the merchant – will bear the financial liability for
any additional counterfeit fraud transaction that is disputed on a
card account after 10 chargebacks. This limit does not prevent a
Card Member from disputing additional fraudulent transactions.
“Combating fraud is an ongoing priority for American Express,”
said Mike Matan, Vice President, Global Network Business, American
Express. “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.”
The changes announced today by American Express will remain in
effect until April 2018. The changes are expected to help reduce
counterfeit fraud costs for merchants who have not yet upgraded
their point-of-sale terminals to accept EMV chip cards. An analysis
by American Express found that more than 40% of its counterfeit
fraud chargebacks in the U.S. are for transactions under $25.
EMV technology reduces the risk of fraud stemming from
counterfeit payment cards by storing information on a
microprocessor chip embedded in a card. Card Members dip or insert
their EMV chip cards into a merchant’s payment terminal instead of
swiping their cards. Under a Fraud Liability Shift implemented by
American Express in October 2015, the party – merchant or card
issuer – with the least secure form of technology is responsible
for counterfeit fraud costs.
American Express earlier this month announced the availability
of Amex Quick Chip, which enables Card Members to dip their chip
card during the check-out process and remove it before the
transaction is completed. This can reduce the time Card Members
must keep their Cards inserted in the terminal, providing an
experience similar to swiping a magnetic stripe card and enabling
merchants to streamline the checkout experience. American Express
also offers merchant acquirers a self-certification program that
allows them to perform the tests necessary to certify merchants’
point-of-sale devices for EMV chip card acceptance. The program
enables merchant acquirers to complete the required POS
certifications within as little as a few hours. Today, the vast
majority of U.S. POS certifications on the American Express Global
Network are performed using the self-certification program.
For more information about the self-certification program,
merchant acquirers can visit:
https://network.americanexpress.com/en/globalnetwork/certification/.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
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version on businesswire.com: http://www.businesswire.com/news/home/20160622005740/en/
Andrew Johnson, American Express212-640-8610,
andrew.r.johnson@aexp.com
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