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Small Businesses at Risk of Missing EMV Credit Card Deadline

EMV credit cards have become the global standard in nearly every major market except the United States. But even this will change as 2015 liability regulations place greater pressure on merchants that have yet to embrace EMVs. If and when fraudulent activity occurs, non-EMV businesses will have to cover losses out-of-pocket.

The 2015 deadline is fixed.

Even still, many experts don’t believe that the U.S. credit card industry will become fully EMV-compliant until 2018 at the earliest. And according to Javelin Strategy & Research, small businesses represent one of the biggest bottlenecks to America’s EMV transition.

But why have a deadline at all? And equally important, why do smaller businesses continue to lag behind?

The EMV Deadline – What Purpose Does It Serve?

The EMV deadline stems from security concerns. These chip-enabled credit cards help to reduce fraud. That the United States is one of the last markets to embrace EMVs partially explains why it is disproportionately affected by credit card fraud.

Although Javelin Strategy & Research predicts that U.S. merchants will have to invest $2.6 billion over the next several years to upgrade their current credit card terminals, this pales in comparison to the $11+ billion in annual global credit card fraud (of which the U.S. represents nearly 50 percent).

Why Are Small Businesses at Risk of Missing the Deadline?

EMV credit cards are safer. And failure to comply with the new standard will become increasingly expensive once the 2015 liability laws go into effect. So why haven’t small businesses jumped on the bandwagon yet?

There are three main reasons:

  1. Awareness. Many small businesses don’t know about the deadline, the technology or the security benefits. EMVs are still a relatively new concept in the United States.

  2. Cost. Small businesses remain reluctant about investing resources to upgrade their current terminals. In addition to hardware updates, they must also train their staff how to properly process EMV credit cards — both online and in retail stores. For many companies, it makes more sense to direct limited resources toward more “important” business activities.

  3. Need. For small businesses that are aware (and have the budget), there’s not always a perceived need to make the transition. Why invest in the technology when most American consumers don’t carry EMVs in their wallets?

Should Your Small Business Try to Beat the Deadline?

The above hurdles are real. But credit card fraud is expensive. It represents a significant blow to your bottom line — both in terms of money lost and the time and paperwork necessary to dispute fraudulent claims. And there’s also the increased risk of violating PCI compliance rules or losing your merchant account altogether.

Switching to EMV technology may seem cumbersome. But continued reliance on less secure, swipe & sign credit cards isn’t worth the risk.

To help your business meet the 2015 deadline with minimal hassle, use the free links below:

Topics: PCI Compliance and Fraud Prevention

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