Beginning Oct. 31, 2012, issuers, merchants and acquirers in Canada that support the American Express brand will become liable for credit and charge card fraud initiated with magnetic stripe cards that chip-and-PIN technology could have prevented, American Express Co.’s AmEx Canada confirms.
AmEx is the last major card network to set a card-fraud liability deadline in Canada. AmEx will be introducing the policy to address the avoidance of fraud at both point-of-sale devices and cards, a spokesperson tells PaymentsSource.
Beginning Oct. 1, Canada’s Visa merchants, acquirers and issuers that have not converted to chip-and-PIN technology may become liable for fraudulent transactions that EMV could have prevented; MasterCard’s deadline is Oct. 15.
EMV is an international standard for chip-based payment card transactions that requires a PIN to authenticate the cardholder, providing some security advantages over signature-based magnetic stripe cards.
Most major countries around the world have adopted EMV technology in recent years. Canada’s shift to EMV means that the U.S. is the only major market still relying solely on mag-stripe card technology (
The fast-approaching Visa and MasterCard deadlines caused Canada’s merchants to scramble in recent months to ensure payment terminals support chip-and-PIN technology, but analysts expect the majority to comply by the end of the year.
Most merchants likely will not have to make dramatic changes to comply with AmEx’s deadline, Catherine Johnston, president and CEO of the Advanced Card Technology Association of Canada, a nonprofit payments-industry association based in Ontario, tells PaymentsSource.
“Most companies have already been through the learning curve on EMV because of the Visa and MasterCard deadlines, and there will be minimal changes in what AmEx requires,” Johnston says.
Nevertheless, merchants also are likely to be pleased to receive EMV guidance from AmEx, Johnston adds. “This should bring a sigh of relief to merchants who were wondering what they might have to do about AmEx, and now they have some clarity,” she says.
By the end of this year, more than half of Canada’s 800,000 merchant-acceptance points will be EMV-compliant, and approximately 70% of the country’s estimated 105 million credit and debit cards will be equipped with chips, according to the association.
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