Less than two months remain until new credit card processing laws go into effect, yet most small businesses are unaware of the pending changes, new research finds.
Just 32 percent of small business owners know of the upcoming Europay, MasterCard and Visa (EMV) rules, which stipulate that businesses that do not upgrade to credit card equipment that can read chip-enabled credit cards will be liable for fraud and security breaches, according to a Gallup study.
Currently, if an in-store transaction is made using a counterfeit, stolen or compromised card, consumer losses from that transaction fall back on the payment processor or issuing bank, according to CreditCards.com. However, beginning Oct. 1, that liability will shift to whichever party is the least EMV-compliant in a fraudulent transaction.
Part of the reason for such low awareness of the new rules is that just 35 percent of the businesses surveyed currently accept point-of-sale credit card payments. However, even among businesses that accept credit cards, awareness of the upcoming changes is just 49 percent, compared with 23 percent among those that don't accept credit cards. [5 Tricks to Lower Credit Card Processing Fees ]
"About half of small-business owners who accept credit cards are not aware of the major changes forthcoming this fall," the study's authors wrote.
Even companies that are aware of the changes aren't in any hurry to upgrade their equipment. Less than 30 percent of small business owners who accept credit cards but who do not have chip-enabled technology plan to comply by the October deadline, 34 percent expect to comply at a later time and 21 percent do not plan to upgrade their systems at all.
Overall, small business owners are divided on whether the new EMV rules will actually provide companies with better fraud protection, which is the law's major objective. The research discovered that 42 percent of the businesses surveyed believe the new law will greatly or somewhat improve protection, while another 42 percent think it will improve protection not very much or not at all.
The study was based on surveys of 600 U.S. small business owners in all 50 states.