The coming wave of chip-enabled EMV credit cards is good news for consumers, who will be better protected from fraudulent charges and identity theft, but for small businesses, it could be a headache.
As of October 2015, businesses must be prepared to accept EMV credit cards, which are equipped with microchips that encrypt cardholder information and keep people safe from credit card thieves. If they don’t accept the cards, they can be held liable for fraudulent charges. However, becoming EMV-compliant could be a challenge for small business owners.
EMV stands for Europay, MasterCard and Visa, and EMV cards will replace traditional magnetic-stripe cards. According to a recent report by Intuit Inc., only 42% of small businesses are planning to change their payment acceptance procedures to become EMV-compliant. And 42% are not even aware that there is a deadline for them to begin accepting EMV cards. Eighty-five percent of those who said they won’t accept EMV cards, or haven’t decided whether or not they will, aren’t aware of the legal and financial liabilities that could result from not accepting the new payment method.
When asked why they might not make the change to accept EMV cards, over half of Intuit survey respondents said the reason came down to cost. The new card readers cost money, and 57% said they just don’t have it in the budget. Another 58% said when customers pay with a credit card, they spend more money. Given that logic, it might be assumed that businesses would be eager to accept credit cards, even if they have to shell out some funds to get the new card readers that allow them to be compliant. Eighty-six percent of businesses that aren’t planning to make the switch will not be able to afford the financial and legal repercussions of being liable for fraudulent card transactions that could result from not accepting EMV cards.
Eric Dunn, senior vice president of payments and commerce solutions for Intuit, said that when it comes to migrating to EMV card acceptance, money and time are the biggest barriers for small businesses. Intuit is offering a small, easy-to-use, and portable EMV card reader for small businesses, aiming to make the switch easier for them. “We want [small businesses] to know we’re beside them on this journey to a more secure payments infrastructure, and are providing an affordable solution as well as equipping them with resources to ease any burdens.”
The Intuit survey was conducted in April 2015 and included responses from 504 businesses with 100 or fewer employees.