In an effort to promote further adoption of EMV in the U.S., American Express 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.
An analysis by American Express found that more than 40% of its counterfeit fraud chargebacks in the U.S. are for transactions 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.
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.
The changes announced will remain in effect until April 2018.
