The Latest on EMV

The U.S. continues to see a slow rollout and implementation of EMV. Well beyond the start date of October 2015, only 17% of small to medium businesses using an integrated POS have upgraded to EMV.1

Card brands have also taken a step back to evaluate the EMV rollout with both Visa and American Express modifying their chargeback policies for merchants not yet ready to accept chip cards. Those changes include a decision to block all U.S. counterfeit fraud chargebacks under $25. According to their research, American Express discovered that 40% of counterfeit fraud chargebacks occur on transactions below the $25 threshold.2 Visa and American Express issuers, too, will limit chargebacks to 10 fraudulent counterfeit transactions per merchant account, and will assume liability for all fraudulent transactions after the limit has been reached. Both changes will remain in effect until April 20183. These policies are designed to give merchants more time to upgrade systems for chip cards while limiting merchant fraud losses. Specific to the verticals Global Payments Integrated serves, we see low to moderate chargeback risk, with very few chargebacks reported. In fact, over the entire Global Payments Integrated portfolio, only 0.005% of sales volume has been reported as EMV chargebacks4.

What Does This Mean to Merchants?

This is good news for merchants. These changes give more time to update systems for EMV while reducing excessive chargebacks. Please note that there is no action required to qualify for the new EMV chargeback policies from Visa and American Express; the changes will be implemented automatically. Beyond the new chargeback policies, several of the card brands are working on resolving another merchant EMV concern – the time it takes to approve a chip transaction. Visa and American Express are both working on technology to speed up transaction times. Visa has introduced Quick Chip for EMV, allowing consumers to remove cards from payment terminals before the transaction amount is finalized or before the authorization response is received. American Express recently announced the launch of Quick Chip, a service to provide a quicker route to process chip card transactions.

1.Piper Jaffrey
4.Internal Global Payments Integrated data