American Express Limiting EMV Chargebacks for Merchants

American Express Limiting EMV Chargebacks for Merchants

June 22, 2016         Written By John H. Oldshue

To encourage EMV card adoption in the United States, American Express announced it is changing its EMV chargeback policy to help merchants lower their fraud costs as they update to the new EMV point-of-sale (POS) systems. Beginning in August, American Express will not hold merchants liable for chargebacks if the fraudulent transaction is less than $25.

American Express has found that more than 40% of counterfeit fraud chargebacks are for less than $25.

The credit card company also plans to limit the amount of counterfeit fraud charges to 10 per card. This means the card issuer, not the merchant, will be liable for any fraudulent transactions after 10 chargebacks. This will not prevent a cardholder from disputing additional fraud, though.

“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.”

These changes, which will remain in effect until April 2018, are expected to reduce counterfeit fraud costs for merchants who have not yet updated to EMV terminals.

American Express, much like Visa and MasterCard, are encouraging merchants to upgrade their POV terminals, because EMV cards reduce the risk of fraud, as payment card information is stored on a the microprocessor chip in the card.

The information contained within this article was accurate as of June 22, 2016. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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About John H. Oldshue

John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.