American Express (AXP) plans to begin issuing secure chip cards in the U.S. this year, and it has released a timeline for merchants to follow in accepting those cards. Like every other network's roadmap, Amex sticks closely to the plan Visa (NYSE:V) announced last August.
As of Amex's Friday announcement, all four major card brands will require most U.S. merchants to use terminals that can handle cards built with embedded EMV chips by October, 2015.
The penalty for missing the deadline is a liability shift for fraud, though the card networks differ slightly in how they plan to enforce it. Amex, like MasterCard (MA), assigns liability to the party with the least secure technology — if an issuer supports EMV chip-and-PIN but the merchant supports a less secure form of EMV (or none at all), the merchant ultimately takes responsibility for fraud losses.
Visa's liability shift requires merchants to use "at minimum, contact chip terminals" with less of a focus on which type of EMV security (PIN or signature) is used. Overall, Visa has placed less emphasis on PIN security in its plans for EMV card issuance in the U.S.
The card networks typically give fuel merchants an extra two years to comply.
Since the card networks began announcing timelines and liability factors, merchant groups have spoken in favor of chip-and-PIN as the most secure payment method.
Amex, like the other card networks, requires processors to support the EMV standard by April, 2013. That October, it allows merchants "relief" from parts of the Payment Card Industry data security standard if they handle 75% of their Amex transactions through terminals that can handle EMV payments.
Visa originally stated that relief from PCI validation would come for merchants who accept 75% of Visa transactions through chip-enabled terminals by October 2012, but MasterCard set a 2013 deadline when it announced its roadmap roughly half a year after Visa's.
American Express says that worldwide, it handles "millions" of transactions for cards that use the secure EMV chip standard.
"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," said Suzan Kereere, senior vice president and general manager for Amex's global network business, in a press release.
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