With a year to go before a key deadline, many merchants are slow to switch to EMV card readers. Those that don’t will find themselves suddenly liable for card-related fraud
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
With a year to go before retailers hit a major deadline for upgrading their credit card machines at the
There are minor changes afoot for cardholders, too. They will likely be receiving new cards in the mail — ones with EMV chips. The cards will still work at stores that do not have EMV card-readers. But if consumers use a chip card at an EMV terminal, they will have to become accustomed to inserting it, not swiping it, and in some cases they might have to enter a PIN.
Weighing the risks
Small businesses might be lagging because they don’t see a need. While major retailers such as Walmart and Target have EMV terminals in place, smaller retailers might not see the payoff in installing the new equipment because they don’t perceive that they have problems with fraud.
“When they say, ‘It won’t happen to me,’ part of our job is to educate them that they’re not different from anybody else,” says Steve Mathison, vice president of payment acceptance with payment processor First Data.
There are tangible benefits to being an early adopter and having that behind you and knowing it’s done, but there are also material risks to being late.
|— Steve Mathison|
Another issue for small businesses is that as larger companies make customer payments more secure, fraudsters that usually scam mega-retailers could migrate to the smaller merchants whose systems remain more vulnerable.
“There are tangible benefits to being an early adopter and having that behind you and knowing it’s done, but there are also material risks to being late,” he says.
By the end of 2014, an estimated 5 million of the 12 million U.S. credit card terminals will be EMV-compatible, according to the EMV Migration Forum.
Forum director Randy Vanderhoof says he knows there will be plenty of businesses that won’t make the switch by October 2015 — probably smaller companies that plan just to wait until their existing card readers stop working or become obsolete.
And maybe for some retailers, he says, that’s a risk that’s worth taking.
“If you’re the bait shop in Spearfish, Iowa, and you get the same 100 or 150 customers a year buying bait, the likelihood that you’ll see a significant increase in fraud because of not accepting chip cards isn’t that great,” he says. “The more you have knowledge of your customer base, the lower the value of the average ticket item is, the less likely it is you’ll be the place fraudsters go to commit counterfeit card fraud.”