A major transition is under way in America, and small business owners who fail to act could pay a huge price. United States credit card companies have set October for the national adoption of chip cards — also known as EMV cards. Businesses that haven’t integrated EMV technology to process chip cards will become financially responsible for fraudulent transactions previously covered by the cardholder’s issuing bank.
About 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.
Here at the U.S. Small Business Administration, we’re concerned that too many entrepreneurs in America are at risk of being left in the dark and on the hook. The majority of small businesses must upgrade their payment systems since about 20 percent of payment terminals are currently equipped to accept chip cards and most of these are at larger retailers.
Accepting contactless payments also requires new technology for most businesses. A recent report shows that 87 percent of small businesses don’t currently accept mobile payments. Depending on the cost of the goods and services a small business sells, assuming fraud liability could have serious financial consequences. Most small businesses don’t have fraud departments and can’t afford to stay behind the curve while their large competitors move forward with technology upgrades.
That’s why the SBA partnered with Square to enhance payment security and protect cardholder information. We’re educating small businesses on the transition to EMV — Europay, Mastercard and Visa — cards, so visit the Web site located at www.sba.gov/emv for information about making the switch.
Additionally, we rolled out a cybersecurity Web page for small employers at www.sba.gov/cybersecurity. The site offers a self-paced online cybersecurity course and a free small business cyber planner developed by the Federal Communications Commission at www.fcc.gov/cyberforsmallbiz. We also plan to host additional regional small business cybersecurity workshops, taking advantage of our long-standing partnerships with the Federal Bureau of Investigation and National Institute of Standards and Technology.
It’s crucial to invest in EMV readers and other digital technologies to prevent cybersecurity fraud and protect the integrity of customers’ sensitive data. Many new EMV-enabled and contactless systems are just hitting the market. There are many affordable hardware solutions that won’t break the bank of our small businesses. In fact, accessories to complement existing payment terminals are already available with more coming online every day.
October is National Cybersecurity Awareness Month. We hope your small business joins the movement to switch to EMV technology. It will reduce risk for your customers and, most importantly, protect your bottom line.