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SAN FRANCISCO — Visa Inc. is making major changes to its EMV merchant liability policies. Of greatest significance to convenience store retailers, effective July 22, Visa will block all U.S. counterfeit fraud chargebacks under $25.
“These smaller chargebacks generate a great deal of work and expense for merchants and acquirers, with limited financial impact for issuing banks,” Visa wrote in a statement. “In addition, effective October 2016, issuers will also be limited to charging back 10 fraudulent counterfeit transactions per account, and will assume liability for all fraudulent transactions on the account thereafter. This reinforces the responsibility issuers already have to detect and act on counterfeit fraud quickly. These blocks will stay in effect until April 2018.
“These two changes together will significantly reduce the number chargebacks that merchants are seeing,” continued the Visa statement. “Following these changes, merchants can expect to see 40-percent fewer counterfeit chargebacks, and a 15-percent reduction in U.S. counterfeit fraud dollars being charged back.”
EMV is an acronym for Europay, MasterCard and Visa, the three companies that originally created the security standard. Under EMV liability shift deadlines, c-store retailers needed to upgrade their point-of-sale devices to accept chip-and-PIN cards as of Oct. 1. Similar liability shifts are set to take place on Oct. 1 of this year for ATM machines and Oct. 1 of next year for automated forecourt devices.
In addition to the chargeback changes, Visa stated it has streamlined its testing requirements, amended and simplified the terminal certification process, and committed to investing further resources and technical expertise in a manner that can reduce timeframes by as much as 50 percent. Visa is also making policy changes to help limit exposure to counterfeit fraud liability for merchants who are not yet chip-ready.
According to San Francisco-based Visa Inc., there are more than 300 million EMV chip cards in the U.S. marketplace, with 1.2 million merchants accepting such cards. An average of 23,000 new locations become chip-ready each week.
There is no word yet if Visa’s competitors will alter their EMV merchant liability policies in similar ways.
As CSNews Online previously reported, Visa is also making efforts to reduce fraud at the pump.