American Express Co. on Wednesday said it will change its chargeback policy -- the amount merchants pay out after fraudulent or false charges -- on EMV chip cards. American Express said by the end of August, merchants won't be liable for counterfeit fraud on transactions under $25. The change is an effort to increase EMV adoption in the U.S., according to a news release. EMV adoption in the U.S. has been slower than expected. An analysis by American Express found more than 40% of counterfeit chargebacks in the U.S. are for transactions under $25, the company said in a release. By the end of 2016, American Express will limit the number of merchant chargebacks to 10. The card issuer will be responsible for any additional counterfeit charges, as the 10 chargeback limit doesn't prevent card members from challenging charges. The changes from American Express are scheduled to be in effect until April 2018. Shares of American Express are down more than 10% in the year to date, underperforming the S&P 500 Index, which is more than 2%.
Continue Reading Below
Copyright © 2016 MarketWatch, Inc.