What’s the Latest on EMV?
The U.S. continues to see a slow rollout and implementation of EMV. We are now well beyond the start date of October 2015, and most merchants at this point realize there was no need to panic. In fact, only 17% of small to medium businesses using an integrated POS have upgraded to EMV.1
The card brands have also taken a step back to evaluate the EMV rollout with both Visa and American Express recently modifying their chargeback policies for merchants who are not yet ready to accept chip cards. Those changes include a decision to block all US counterfeit fraud chargebacks under $25, effective July 22, 2016. According to their own research in the U.S., American Express discovered that 40% of counterfeit fraud chargebacks occur on transactions that are below the $25 threshold.2
In addition, beginning October 2016, VISA and American Express issuers will be limited to charging back 10 fraudulent counterfeit transactions per merchant account, and will assume liability for all fraudulent transactions after the limit has been reached on an account. Both of these changes will remain in effect until April 20183. These changes to the EMV chargeback policies are designed to give merchants more time to upgrade their systems for chip cards while limiting merchant fraud losses.
Specific to the verticals that OpenEdge serves, we see low to moderate chargeback risk, with extremely low numbers of chargebacks reported. In fact, over the entire OpenEdge 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 merchants more time to update their 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 – no intervention is required.
Beyond the new chargeback policies, several of the card brands are also 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 which allows consumers to remove their card from payment terminals before the transaction amount is finalized or before the authorization response has been received. American Express recently announced the launch of Quick Chip, a service designed to provide a quicker route to process chip card transactions.
4.Internal OpenEdge data