Like three of its major competitors have done in the past year, American Express recently announced plans to roll out new credit card technology acceptance requirements for its merchant and payment processing partners.
American Express recently unveiled plans to start requiring that its various partners be able to accept EMV-enabled cards within the next few years, as the global payments community moves toward the new, more secure type of technology, the company announced. Under its new EMV acceptance requirements, payment processors will have to be able to process this type of transaction by April 2013. Further, there is a soft deadline for merchants to do the same by October 2015, after which point any liability as a result of fraud will fall on the party with the least up-to-date technology.
The company will attempt to incentivize early adoption, however, the report said. It will allow merchants who have EMV-accepting technology at the point of sale terminals, at which 75 percent of its transactions are processed, to skip out on Payment Card Industry Data Security Standard reporting requirements.
The company plans to issue the cards capable of making these transactions to consumers in the latter part of 2012, mirroring similar efforts by other lenders over the course of the last year, the report said. Often, these cards were issued to wealthier borrowers who tended to travel abroad more often, and American Express generally has a more affluent customer base than other lenders. Further, the company said it had received some amount of feedback expressing a desire for it to begin issuing these cards.
"The payments industry is continuing to evolve rapidly, and American Express recognizes the growing demand for chip-based contact and contactless payments in the U.S.," said Suzan Kereere, Senior Vice President and General Manager, American Express Global Network Business. "We also fully recognize the complexities involved in migrating to EMV chip-based technology, and our first priority is to provide choice and flexibility for merchants and our card-issuing partners so they can adopt the EMV solution that best meets their needs. As a global payments network, we understand the benefits associated with EMV-based technology, and we are committed to continue enhancing security at the point-of-sale for both merchants and American Express Cardmembers."
EMV - which stands for the companies which pioneered the technology: Europay, MasterCard, and Visa - is generally considered to be far more secure for all parties involved in a purchase than the magnetic strips traditionally featured on nearly all U.S.-issued cards. Most of the rest of the world has already switched over to EMV technology, and U.S. cardholders traveling to Europe, Southeast Asia and Central America may have difficulty finding a business that is capable of accepting a magnetic strip card. The U.S. is the only major country in the world that still relies upon the older type of technology for its standard cards.
