Amex Follows Suit, Limiting EMV Chargebacks for Merchants

Emily VuittonChargebacks1 Comment

AMEX Chargeback Policy Adjustments for EMV

Last week it was Visa, earlier this week it was MasterCard, and now American Express has announced it too would make adjustments to EMV chargeback policies.

Merchants across the US, particularly small and medium-sized businesses, are facing length EMV terminal certification backlogs. Which then results in an increase of chargebacks due to the liability shift. Just last year, SMBs saw chargeback rates in Q4 2015 increased nearly 31 percent compared to Q3.

American Express made similar adjustments to its chargeback policy to Visa’s changes announced on June 16th.

Amex’s Temporary Chargeback Policy Changes:

  • Beginning the end of August 2016, merchants will not be liable for counterfeit fraud chargebacks under $25.
  • Beginning the end of 2016, Amex will limit the number of counterfeit fraud chargebacks to 10 per card account.
  • Above changes will remain in effect until April 2018.

Chargeback Reason Code Effected:

Explaining the Changes

The first change to shift liability onto the card issuer for chargebacks under $25 should provide merchants with a great deal of relief. Amex found that 40 percent of counterfeit fraud chargebacks it sees are for transactions under $25. This alone should provide a noticeable relief for merchants.

Similar to Visa’s changes, Amex will also cover liability for all counterfeit fraud transactions disputed from a card account after 10 chargeback occurrences. This doesn’t stop the cardholder from disputing transactions, but it should limit the future disputes that the merchant must field.

No Changes to Certification Process

While MasterCard and Visa included changes aimed at expediting the EMV terminal authentication and certification process, American Express instead continues to offer merchants a self-certification program. This program allows them to test and certify POS devices for EMV chip acceptance.

We’re really happy to see card issuers showing understanding to merchants who are struggling through the shift to EMV under no fault of their own. Now that Visa, MasterCard, and American Express have extending a hand to merchants, will we see an announcement from Discover soon?

Header Background Image Adapted from The.Comedian/Flickr