Aug. 7, 2015—Beginning Oct. 1, businesses that do not support EMV chip card technology, or have the ability to process and read EMV data in newly issued credit or debit cards, will assume liability for any fraudulent point-of-sale credit or debit card transactions.
And, according to a recent survey conducted by Wells Fargo, many small business owners are not prepared for the switch to EMV chip cards and are unaware of the impending EMV liability shift.
The survey, which was conducted July 6-10, shows that less than half (49 percent) of small business owners who accepted point-of-sale cards were aware of the Oct. 1 liability shift.
In order to meet the deadline, financial institutions are issuing EMV chip-enabled credit and debit cards designed to protect against fraudulent transactions by encoding cardholder information within a microchip and data that changes with each transaction. Merchants are converting to new card readers or adding EMV capability to existing magnetic stripe card reader payment terminals.
Only 31 percent of business owners who reported accepting point-of-sale card payments say that their existing credit card processing system accepts chip-enabled cards. Only 29 percent of business owners say they intend to make the change before the deadline, 34 percent say they will at some point in the future, and 21 percent say they never plan to upgrade.
“While our industry has made great progress in the last year informing and preparing small business owners for the EMV liability shift, the survey findings show us that we have more work to do,” said Debra Rossi, head of Wells Fargo Merchant Services. “At Wells Fargo we continue to focus on providing business owners the support they need to get ready – from reaching out to business owners who are directly impacted to offering a wide array of resources that help business owners understand EMV, its benefits and the impact of the upcoming liability shift.”
The survey also shows that business owners are divided on whether or not the liability shift will reduce fraud for business, which is the main objective of the EMV chip-enabled cards. 42 percent feel it will improve fraud protection, and 42 percent feel it will not.
