Timing is everything: American Express Unveils EMV Plans as Fraud Continues Migration to US

Last updated: 19 March 2014

It didn’t take a crystal ball to see the evitable: with the rest of the world migrated to more secure EMV chip technology, fraudsters would move on and seek out the weakest link to carry out banking crimes.  This weak link would be, of course, the United States – the country still using antiquated magnetic stripe technology.

Predicting this fraud migration is one thing, but seeing it happen, sadly, is another.  I’ve blogged about it before, and continue to see these large crime rings in the news.  Most recently, it was a carding operation that stole credit card numbers from 47 organizations.  After a two year investigation, the FBI arrested 11 individuals in the United States, and 13 others from different countries.  More than 411,000 credit and debit cards were compromised.

My only consolation when reading these stories is that EMV is coming to the United States.  I was pleased with American Express’ timing just last week when the company announced its commitment to EMV in the US.  With the announcement, AMEX joins MasterCard, Visa and Discover on the path toward EMV. AMEX’s Suzan Kereere said, “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.”

In its statement, AMEX outlined its key policy requirements and dates:

“By April 2013, processors must be able to support American Express EMV chip-based contact, contactless and mobile transactions.

Beginning October 2013, merchants will be eligible to receive relief from PCI Data Security Standard (DSS) reporting requirements if the merchants’ point-of-sale (POS) acceptance locations, where 75% of their transactions occur, are enabled to process American Express EMV chip-based contact and contactless transactions.

Effective October 2015, American Express will institute a Fraud Liability Shift (FLS) policy that will transfer liability for certain types of fraudulent transactions away from the party that has the most secure form of EMV technology. US fuel merchants will have an additional two years, until October 2017, before the FLS takes effect for transactions generated from automated fuel dispensers.”

Note that AMEX’s policies are very similar to MasterCard and Visa’s.  In other words, the US payments industry is aligning.  We’re on our way to secure EMV chip cards, and moving away from less secure magnetic stripe and time when it’s common to read fraud news like the FBI’s recent arrests. I don’t know about you, but I certainly can’t wait.