American Express (Amex) has announced changes to its EMV chargeback policy to enable merchants limit their fraud costs as they upgrade their point-of-sale (PoS) systems.
By end of August 2016, merchants will not be held liable for chargebacks for counterfeit fraud when a transaction is less than $25, as per the latest policy update by Amex which is expected to promote further adoption of EMVs in the US.
Additionally, Amex has plans to cap the number of counterfeit fraud chargebacks to a total of 10 per card account by the end of 2016. Once this comes into force, the financial liability will be borne by the card issuer, instead of merchants, for any additional counterfeit fraud transaction disputed on a card account after 10 chargebacks.
Amex further said that the recent limit does not stop a cardholder from disputing additional fraudulent transactions.
Amex vice president of global network business Mike Matan said: "Combating fraud is an ongoing priority for 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."
The changes in EMV chargeback policy will remain effective until April 2018. It is likely to be helpful in reducing counterfeit fraud costs for merchants who have not yet upgraded their point-of-sale terminals to accept EMV chip cards, according to Amex.