NEW YORK (TheStreet) – Mom-and-pop shops know they have to switch to chip-and-PIN credit- and debit-card readers by October, but many of them still haven't figured out what that new technology is yet.
Visa, MasterCard, Discover, American Express and their banking partners have set a government-enforced deadline of Oct. 15 for a “liability shift” that, for the first time, would make merchants liable for fraudulent charges resulting from using point-of-service readers that can't read chip-and-PIN EMV cards. Unfortunately, a survey indicates that just 42% of small-business owners plan to make the switch.
Intuit, the company that produces Quicken and TurboTax financial software, conducted a survey that discovered that was the percent of small-business owners who haven't heard of the EMV liability shift deadline. Nearly 60% of those surveyed cited the cost of a new terminal or reader as the top reason keeping them from upgrading, while 85% who aren't making the switch are unaware of the financial and legal liabilities they will be responsible for starting in October.
“The biggest barriers for small businesses to become EMV-compliant are cost and lack of time or resources required to research terminals,” said Eric Dunn, Intuit's senior vice president for payments and commerce solutions.
Granted, Intuit has its own motivations here: It's offering a card reader of its own. But it brings up the valid point that 58% of small businesses have higher sales transactions when customers pay with a credit card — and 86% of small-business owners who aren't switching may not be able to handle the financial and legal liabilities of fraudulent card transactions.