American Express makes major EMV push
October 21, 2014

The major news in mid-October was that the push for chip-based credit and debit cards had to accelerate in some way, shape or form. While President Barack Obama laid out some plans to encourage businesses to accept cards that use the EMV standard, some companies are already pushing forward to expand use of the chip in any place that accepts credit card payments. There's a great incentive for retailers to switch: If they purchase card readers that accept the standard by October 2015, they won't be held liable for all card payments in the event of fraud. Surprisingly, American Express, one of the main competitors of EMV creators Visa and MasterCard, wants to help retailers adopt the new technology.

A discount to switch
American Express announced on the same day of President Obama's speech that it would be helping retailers make the transition to EMV. It will distribute over $10 million to 100,000 businesses to help buy new point of sale terminals that are capable of reading EMV cards. As a consequence, they'll be able to afford making the switch in time for the October 2015 deadline. Digital Transactions notes that the money spent will likely mean that a retailer will likely get at most $100 to help pay for a new terminal. Still, any little bit helps retailers.

The two main criteria for being able to accept money from American Express is to purchase a device that is capable of reading EMV cards in some way and be able to accept its credit cards. It doesn't necessarily have to be a new POS terminal that accepts EMV, for a card reader would be just as acceptable. The other criteria is that businesses must not make more than $3 million in transactions through American Express, nor can they be franchises.

There are benefits for both merchants and American Express. For retailers, they get an opportunity to learn more about the EMV standard. The critical bottleneck over acceptance within the EMV standard is small-to-midsized stores and store chains, who often lack interest in payments because they're too busy running the business to pay attention. By offering discounts, these stores learn more about the standard and why it's important to switch On the other hand, American Express can demonstrate that it's doing its part to address the slow shift from mag stripe to EMV. That will likely increase the number of customers that use the card.

Nexus: G-WEBCD2