Wells Fargo Study Shows Small Businesses Aren’t Ready For EMV Shift
Payment industry players have been racing in recent months to meet the EMV liability shift, which is designed to reduce fraud within the industry. Financial institutions have started issuing EMV chip-enabled debit and credit cards, and merchants have added EMV capability to their existing magnetic stripe card reader payment terminals or converted to new card readers.
But with the liability shift now just two months away, majority of small businesses are still unaware of the October 1 deadline, according to a quarterly small business survey conducted by Wells Fargo.
The latest Wells Fargo/Gallup Small Business Index found that less than half or 49 percent of small businesses that support point-of-sale card payments are aware of the October 1 liability shift.
By this time, merchants or card issuers that do not support EMV chip cards will assume liability for fraud POS card transactions.
Among small businesses with POS card payments, only 31 percent say their existing credit card processing system supports chip-enabled cards.
Of this percentage, 21 percent have plans to upgrade their POS credit card terminals before the liability shift, while 34 percent say they will upgrade in the near future. Twenty-one percent have no plans of upgrading their terminals.
When asked why they do not want to upgrade, 48 percent of the 600 respondents say upgrading will not have an effect on their business. Forty-six percent do not want to spend money on the upgrades, while 41 percent are not concerned about the liability shift.
Small business owners also share divided opinions as to whether the liability shift will reduce fraud: 42 percent say it will boost protection from fraud, while 42 percent feel the opposite.
Meanwhile, the survey also found that check or cash remains the preferred payment method among small businesses (94 percent), followed by card payments (41 percent) and mobile (15 percent).