After Visa recently announced that it is changing its chargebacks policy in a bid to increase EMV migration following the October fraud liability shift, American Express is doing the same by allowing merchants to avoid being liable for for chargebacks for counterfeit fraud when a transaction is under $25.
Also, just like Visa, AmEx is limiting 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.
“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, Global Network Business, American Express.
These policy shifts come about after research conducted by American Express discovered that four-out-of-ten of its counterfeit fraud chargebacks in the U.S. are for transactions under $25.
The company also joins Visa and MasterCard with the introduction of Quick Chip, which allows the user to insert and remove the EMV card before the transaction is completed and thus creating the same experience as swiping a magnetic stripe card.
The moves comes during a tough period for American Express. The company is feeling the squeeze on both sides from Visa and MasterCard, as the payment giants are targeting its customer base. Recently, the retail giant, CostCo formally ended its relationship with American Express and switched credit card providers to Citi Visa and the company’s stock fortunes also took a tumble, a 4.3% drop in revenue in 2015 while Visa and MasterCard’s both went up.
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