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American Express No Longer Charging Merchants EMV Chargeback Fees Under $25

American Express announced that by the end of August 2016, the company will not hold merchants responsible for fraudulent charges that are less than $25.00. Since the EMV liability shift in October 2015, merchants are now financially responsible for EMV chargeback fees for all fraudulent EMV credit card transactions. The goal of the new American Express policy is to limit the number of chargebacks that merchants need to pay while upgrading their hardware and waiting to be EMV certified.

For many merchants, the fees associated with chargebacks (and the chargebacks themselves) impose a heavy financial burden – a handful of chargebacks can be the difference between a profitable month and a month where a merchant must take a loss. And it’s not just a merchant’s financial situation that chargebacks affect. Too many chargebacks, whether successfully repealed or not, can harm a merchant’s reputation, result in a freeze of their merchant account, a complete termination of their account altogether, or even an investigation and criminal charges. Not to mention chargebacks come with their own slew of chargeback fees and penalties, which if proven valid, are debited from the merchant’s account.

It’s no secret that EMV chargebacks are one of the most frustrating aspects of the EMV liability shift. As one spokesperson for American Express said, “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.”

American Express isn’t the only company limiting chargebacks for merchants. Visa has also imposed a $25.00 threshold on chargebacks and Mastercard is closely monitoring all chargebacks. American Express and Visa will also limit chargebacks to ten per card account in the hopes of reducing counterfeit card fraud. American Express and Visa will keep their new policies in place until April 2018.

The best way to avoid chargeback fees is to become EMV compliant. Unfortunately, getting EMV certified can take weeks or months – and while merchants are waiting, they are still financially liable for EMV chargebacks. But, implementing a semi-integrated solution can help. Merchants should look for a solution that is EMV capable, works with their existing point-of-sale systems, and seamlessly fits into their current setup. Our EMV-capable, PCI-compliant, mobile payment solution, MiPoint, can quickly and easily make any business EMV compliant. Get in touch with us today to find out how MiPoint can work with your business.

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