Chargeback Changes for VISA, AMEX Posted by Association of Vermont Credit Unions on 10:33 AM

Major card networks have announced changes to their charge-back policies, which become effective in coming weeks. The changes come as a result of merchant complaints of ballooning charge-backs stemming from the migration to EMV chip cards.

Charge-backs are a demand by credit card issuers for a retailer to make good on the loss stemming from a fraudulent or disputed transaction. Details, including links to each card issuers proposed changes, are online.

Visa’s changes become effective 7/22, at which time all U.S. counterfeit fraud charge-backs under $25 will be blocked due to generating a lot of work and expense for merchants and acquirers, with limited financial impact for issuing banks, according to Visa.

Beginning in October (no exact date has been specified), Visa issuers will be limited to 10 fraudulent charge-back transactions per account.

American Express is making similar changes, with the end of $25 charge-backs coming at the end of August, and the end of 2016 for the 10 transactions per account limit.

Both Visa and American Express have estimated that the combined impact of these changes would result in a 40% reduction of charge-back transactions and approximately a 15% decline in charge-back dollars.

The new guidelines will remain in place through April 2018 for both Visa and American Express.

MasterCard has announced enhancements to speed its EMV testing and certification process, but has not implemented any rule changes.