Dive Brief:
- American Express has joined the movement to lessen fraud liability impact on merchants who have yet to make the transition to EMV chip-based payment terminals.
- Similar to a recent move by Visa, American Express plans to limit retailers' exposure to counterfeit fraud chargebacks by not holding them responsible for charges under $25, a policy that will start in August and extend until April 2018.
- American Express also said that by the end of this year it would limit merchant fraud liability to 10 bad charges per card account. Further charge would be the responsibility of the card issuer.
Dive Insight:
It doesn't necessarily sound like an original idea, but American Express probably has the right idea. Like Visa, it's blocking fraud charges on purchases lower than $25, which seems like a gesture that will grant merchants some of the relief they have been looking for as they continue to slog through what has been a slow migration to EMV technology.
Interestingly, Mastercard, while saying it was keep an eye fraud so that chargebacks to merchants would not become excessive, didn't introduce a $25 limit, so we'll see if Visa and American Express end up looking a little more like heroes as the EMV transition progresses.
Mike Matan, vice president of AmEx’s global network business, said in a company statement, “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.”
Nice gesture, though it took a while for the major credit card networks to do something about the complaints that have surfaced from merchants during the EMV migration. After the ramping up availability and delivery of EMV terminals, streamlining activation and trouble-shooting, and easing the liability burden for merchants, the road to adoption looks much clearer. Of course, the coming months will test that analysis of the situation. We'll find out if all the major hurdles have been overcome, or if there are still a few lurking on the horizon.
