A major transition is happening in America and business owners who fail to act may see an impact on their bottom line. U.S. credit card companies have set October for the national adoption of chip cards. Businesses that have not integrated EMV (Europay, MasterCard, Visa) technology to process chip cards will become financially responsible for fraudulent transactions previously covered by the cardholder’s issuing bank.
Roughly 90 percent of credit card terminals in Europe are now chip-enabled. The United Kingdom has seen nearly a 70 percent decline in counterfeit card transactions since making the transition, according to Barclays. Meanwhile, America has 25 percent of the world’s credit card use but 50 percent of the world’s credit card fraud, making the case to shift from antiquated swipe-and-sign to microchips on credit cards.
The U.S. Small Business Administration (SBA) is concerned that too many entrepreneurs are at risk of being left in the dark and on the hook. The majority of small businesses will need to upgrade their payment systems, as only about 20 percent of payment terminals are currently equipped to accept chip cards, and most of these are at larger retailers. Depending on the cost of the goods and services that a small business sells, assuming fraud liability could have serious financial consequences.
SBA has partnered with Square to enhance payment security and to protect cardholder information. We’re educating small businesses on the transition to EMV cards; check outwww.sba.gov/emv to make the switch. Additionally, we rolled out a cybersecurity page for small employers at www.sba.gov/cybersecurity.
It is crucial to invest in EMV readers and other digital technologies to prevent cybersecurity fraud; accessories to complement existing payment terminals are already available.
October is National Cyber Security Awareness Month; therefore, we hope your small business joins the movement to switch to EMV technology. It will prevent risk for your customers, and most importantly, protect your bottom line.