SAN FRANCISCO–As the EMV chip card replaces the magnetic stripe many consumers will be reaching for their new cards at the POS.
Unfortunately, deterred by equipment costs and general unawareness, small and micro businesses have avoided upgrading their terminals, notes one new analysis, which adds that due to the “upcoming fraud liability shift in October, failure to upgrade will leave these businesses vulnerable to fraud costs.”
That analysis is part of the first report issued by Javelin Strategy & Research’s new small business practice area. The report, Small Business EMV Readiness, assesses the readiness and current state of transition of small and micro-merchants to EMV.
With the introduction of Apple Pay and other mobile wallets, consumers are starting to make mobile payments more frequently and the trend is catching the attention of small businesses, the report observes. Among small and micro merchants, 36% would be motivated to upgrade their existing POS terminals to accept EMV if new systems would also facilitate acceptance of mobile payments, the report found. Small merchants are even more willing to upgrade their terminals; 45% indicated they would be motivated to update their current POS stations if their new systems would enable them to accept mobile wallets like Apple Pay or Google Wallet.
“Many small and micro businesses are dependent on POS transactions for their livelihood, but only one-in-three claims to have knowledge of EMV. The government and banks need to do a better job of preparing business owners for the impact EMV fraud liability shift,” said Michael Moeser, director of payments at Javelin. “Otherwise, small businesses will be the weakest link in the EMV chain and will bear a significant portion of today’s counterfeit card fraud costs, which could cause some to go out of business."