A majority of small business owners nationally and regionally are unaware of the so-called “EMV1 liability shift” coming Oct. 1, according to the latest Wells Fargo/Gallup Small Business Index conducted July 6-10.
Far from bliss, ignorance of the new security technology could leave a business responsible for point-of-sale fraud.
“When I talk to small business owners across the Northeast, many have no idea about the upcoming changes on October 1,” said Marcus Cobbe, who assists Wells Fargo”™s Connecticut businesses with annual revenue streams below $2 million. “Our national survey showed that only half of business owners who accept point-of-sale transactions knew about this change and I see that reflected throughout Connecticut.”
In the quarterly small business survey, fewer than half (49 percent) of small business owners who accept point-of-sale card payments report being aware of the liability shift. On that day, a card issuer or merchant that does not support EMV chip card technology will assume liability for any fraudulent point-of-sale card transactions.
To meet the Oct. 1 deadline, financial institutions are issuing EMV chip-enabled credit and debit cards, which are designed to protect against fraudulent transactions by encoding cardholder information within an encrypted microchip and data that changes with each transaction.
Merchants are also converting to new card readers or adding EMV capability to their existing magnetic stripe card reader payment terminals.
Among business owners who report accepting point-of-sale card payments, only 31 percent said their existing credit card processing system accepts chip-enabled cards. When asked if they plan to upgrade their point-of-sale credit card terminals to accept EMV chip cards, just 29 percent of business owners said they intend to make the change before the Oct. 1 deadline.
Another 34 percent of business owners reported they will make the switch at some point after Oct. 1; and 21 percent say they never plan to upgrade. In the survey, some of the top reasons business owners said they do not plan to swap their terminals before October included:
- 48 percent feel that upgrading their payment terminal will not impact their business;
- 46 percent do not want to pay for the costs associated with upgrading; and
- 41 percent said they are not concerned about the liability shift in the case of fraud.
