With the introduction of EMV (chip cards) in the U.S., the credit card brands have shifted responsibility for certain fraudulent transactions from the credit card issuer to the credit card accepting merchant. This shift went into effect in October 2015 and some merchants – including car wash operators – have received a significant number of chargebacks attributed to fraud at non-EMV terminals.
To provide some relief, Visa® has announced a change to chargeback rules. Effective July 22, 2016, Visa will no longer allow chargebacks to the merchant for sales under $25. These cases will be handled as in the past where the credit card issuer absorbs the cost for the fraudulent sale. The announcement indicated that this new rule will be in place until April of 2018. To view the complete announcement, click here.
American Express® will implement the same initiative in August, and MasterCard® will also be limiting chargebacks but have not yet provided details.
Unitec will continue to monitor card brand directives and provide updates to our customers as EMV programs evolve.
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