Survey Shows Only 43% Of Small Businesses Accepting Electronic Payments Have Technology To Accept Chip-Enabled Cards
Though there is no firm deadline for all magnetic-strip credit and debit cards to be replaced with chip-enabled technology, as of Oct. 1, businesses that accept cards but lack the technology to process chip-enabled cards will be liable for fraudulent card purchases, rather than the financial institutions issuing the cards. An NFIB survey released Tuesday shows small businesses across the US are struggling in the face of these new regulations. The survey of 750 small business owners employing between 2 and 249 workers showed that “about 30 percent of small employers accepting card payments are very familiar with chip cards, roughly half are only somewhat familiar and a full 23 percent don’t know anything about them,” according to a press release. The survey also found that just 56% of small employers are aware of the shift in liability that happened Oct. 1, 2015 between card issuers and merchants. Currently, just 43% of small businesses accepting electronic payments have technology to accept chip-enabled cards. However, more than 56% of those who lack this technology are planning to invest in it within the next six months. Costs to upgrade card technology are “a primary concern” for 20% of small businesses planning card technology upgrades.
What This Means For Small Businesses
These latest regulations are an additional burden to small business owners, some of whom are unaware of new costs and penalties associated with card fraud. NFIB Research Director Holly Wade said, “That’s a significant risk for some small businesses. What worries us is that a sizable minority of business owners don’t know the kind of trouble they face if they’re not prepared.” While Wade said the survey results show that “many owners have done their homework, and the card payment industry has done a good job at educating their customers,” she added that “we know based on this research that there’s more work to be done.”
Additional Reading
MarketWatch also covered the NFIB survey results.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
