Visa Improves Limits on EMV Chargebacks to Compliant Retailers

Visa has announced new chargeback policies that will be in effect from July 22 until April, 2018. These changes are designed to safeguard EMV-compliant merchants against liability for fraudulent credit and debit card transactions. Chargebacks under $25 that are due to counterfeit fraud in the U.S. will no longer be charged back to retailers. CSP News reports that Visa will block those chargebacks and, beginning in October 2016, it will also limit card issuers to charging back 10 fraudulent counterfeit transactions per account. For retailers with over 10 fraudulent counterfeit transactions, the card issuer will assume liability. Visa has estimated that these changes will reduce chargeback transactions by 40% and the amount of chargeback dollars by 15%.

In Q4 2015 (Oct- Dec), chargebacks among small- and medium-size retailers rose 15 percent, compared to Q4 2014, according to a survey released by The Strawhecker Group. Industry experts believe that the volume of chargebacks likely has risen since then, because Q4 included only a few weeks under the new rules. "Unfortunately, there are so many [merchants] that have yet to make the switch [to EMV], but we have told them and even preached that this is going to be the result when you don’t adopt EMV in time,” said Stuart Tryon, special agent in charge of the criminal investigative division of the U.S. Secret Service, which probes payment-related crimes.   This article contains information from articles in CSP News and The Wall Street Journal.

Information provided by Patriot Capital