NFIB Research: Nearly a Quarter of Small Employers Aren’t Familiar with Chip Cards

Date: October 06, 2015

For
Immediate Release
Jack
Mozloom, 202-406-4450 or 609-462-5610 (cell)

As big credit card companies offload more
liability for fraudulent purchases, small merchants that don’t have the new
technology could be in jeopardy

October 6, 2015 (Washington, DC) – 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 data released today by the National Federation of Independent Business (NFIB)

“The
potential risk for some small businesses is that they could be liable for additional
fraudulent purchases if they don’t have the new hardware,” said NFIB Research Director Holly Wade.

The
leading consumer credit companies have moved aggressively in the past year to
replace the old magnetic strip technology with new cards embedded with computer
chips as an extra protection against identify theft.  Starting last Wednesday, October 1, however,
businesses that don’t have processors to accommodate the new cards could be on
the hook for more fraudulent purchases.

“That’s
a significant risk for some small businesses,” said Wade.  “What worries us is that a sizeable minority
of business owners don’t know the kind of trouble they face if they’re not
prepared.”

According
to new NFIB research, 56 percent of small employers are familiar with the
so-called merchant liability shift. 
Forty-three percent of those who accept electronic payment have the
chip-enabled hardware.  Among owners who
don’t yet have the new technology, more than half, 56 percent, plan to make the
investment in the next six months.  But
the survey also shows that the cost of upgrading equipment is a primary concern
for about 20 percent of them.

“Many
owners have done their homework and the card payment industry has done a good
job at educating their customers,” said Wade. 
“But we know based on this research that there’s more work to be done.”

For
the full NFIB research report, click here or visit https://www.nfib.com/chipcardstudy.  

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