New chip cards: Is your business ready?
Oct. 1 is a day with big implications for businesses that accept credit and debit cards.
Starting then, businesses could be on the hook for fraudulent transactions if their card readers haven’t been upgraded to accept the new cards, which are embedded with microchips to make them harder to counterfeit.
But many businesses remain unprepared to meet the deadline, despite it being less than two months away, a new report shows.
The report, released Thursday by San Francisco-based Wells Fargo, shows that only 32 percent of small-business owners are aware of the deadline. The report’s findings are based on a Wells Fargo/Gallup survey conducted last month via telephone with 600 small-business owners.
Other business owners who know about the deadline plan to miss it, according to the report.
The most common reason business owners gave for not meeting the deadline: doing so will not impact their businesses.
Expense was the second-most-popular reason. Some business owners said it will cost them $5,000 or more to upgrade.
When asked when they will upgrade their card readers, only 29 percent said they intend to before Oct. 1.
In a statement, Debra Rossi, head of merchant services for Wells Fargo, said that while the financial services industry has “made great strides” in the past year toward preparing small-business owners for the deadline, “the survey findings show us that we have more work to do.”
Much is at stake for banks and businesses who don’t comply.
If lenders haven’t issued the new cards by Oct. 1, they could be liable for any fraud. If businesses don’t have the equipment to accept the new cards, they could be held liable.
The U.S. is behind other parts of the world where EMV cards are already in much wider use. The new cards are supposed to be more difficult for fraudsters to duplicate than traditional cards with black, magnetic stripes on the back.