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A type of credit card technology that is quite popular all around the world will soon be available to American Express cardholders in the U.S.
American Express recently announced that it will be requiring its various merchant and payment processing partners to start accepting EMV credit card purchases within the next few years, the company reported. Payment processors will be required to be compliant first, with a deadline set for April 2013. Merchants will have to be compliant by October 2015, at which point any fraud liability will fall to the party with the least secure and up-to-date technology.
However, the company will also begin issuing these EMV cards to consumers in the latter half of this year, the report said. It says it is doing so because it has heard a considerable amount of demand for these accounts from its customers.
“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 for American Express Global Network Business. “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 andAmerican Express Cardmembers.”
But at the same time, it is also the fourth major card issuer in the U.S. to announce plans for an EMV rollout. In the past year, other companies, such as Visa and MasterCard, have unveiled similar plans, according to a report from American Banker. All follow more or less the same timeframe for merchants and payment processors to become compliant with the new technology. Many have been issuing EMV cards to their more affluent customers for the past several months, particularly if they tend to travel overseas.
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All parties involved in the payment process will likely favor EMV cards, which store payment data on microchips embedded in them, because they are far more secure than traditional cards that rely upon magnetic strips to protect account information. Studies have shown that incidents of credit card fraud are far less common on EMV cards. Nearly all of the developed countries around the world, particularly those in Europe and Southeast Asia, rely on these accounts almost exclusively on this payment technology.
Image: alexliivet, via Flickr