New Chargeback Policy Introduced By American Express Prevents Chargebacks

Jul 26, 2016

In June, American Express joined Visa and announced its new policies. These new chargeback policy changes aim to cut fraud costs for merchants who face dramatically increased chargebacks since the EMV liability shift in October 2015.

New Policies by Amex

American Express told it would not require merchants to be liable for in-store fraud on counterfeit transactions under $25. Reasons for the chargebacks explosion on card-present (CP) transactions since the beginning of 2016 are no yet clear. American Express research shows 40% of the mentioned chargebacks are for transactions under $25, which could rarely be met before the EMV liability shift.

The major card brands have been busy getting rid of the obstacles associated with the EMV adoption this summer. These problems have even made retailers take legal action against the card brands and issuers.

Payment processing safety and security are major concerns to merchants running businesses online. It is of utmost importance to turn to a reputable payment processing company like eMerchantBroker to open a reliable merchant account for one’s company. EMB is voted the #1 high risk merchant account provider in the US and boasts an A+ rating with the Better Business Bureau. EMB offers unmatched security and protection from fraud to help you prevent chargebacks and increase revenue.

Major Card Brands Trying to Curtail the Increase in Chargebacks

Each of the major card brands put efforts to limit the increase in chargebacks. In addition, they launched products and policies aimed at either speeding consumers through lines or improving the efficiency of the certification process.

According to Mike Matan, vice president of Global Network Business for American Express, fighting fraud is an ongoing priority for American Express. Matan notes they consider the migration to EMV in the United States a time-consuming effort. This is the reason why the company is applying these policy changes.

American Express believes the changes to its chargeback policy will provide flexibility to merchants who need more time to upgrade their point-of-sale (POS) terminals to accept EMV chip cards.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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