Time is ticking. Next week, on October 1st, all businesses should be using a new credit card chip technology, or EMV, in their stores. If they don't make the switch, they will be held responsible for fraudulent transactions and not the card issuer.
"Over 95 percent of our guests are credit card transactions, we do very little checks and cash," Jamie-Lynn Mitchell with Mango Salon says. She says her company is in compliance, and all stores are equipped with new machines that will read cards updated with EMV technology. "There are definitely some costs involved in getting the new equipment, but if you consider the cost of the equipment, versus if you have all these fraud claims, it's a no brainier as a business, you want to protect your business in every way that you can," she explains.
You won't really notice any changes outside of the chip embedded in your card. The goal is to make it make it more difficult for crooks to counterfeit cards or steal your information when you make a transaction. While it may sound like a simple adjustment, banks say some businesses have been slow to make the change.
Ben Cucuzza with Wells Fargo says he has seen the delay. "There are two parts, first we found that some businesses see it as cost prohibitive. Based on the amount of merchant transactions and the way the business runs, there are cost involved with the switch. Others don't see it as a risk. They think they haven't had that many fraud cases in the past and they are not going to have any in the future, so why make the shift."
A recent study by Wells Fargo showed many small businesses either didn't know about the change or haven't upgrade their card readers to accept the new smart cards. Business owners we talked to that have made the change, say it was an easy transition and encourage others to do the same. Keep in mind, no agency will force the upgrade but if businesses haven't made the switch by the deadline, they will be liable for financial losses due to card fraud. "It is not mandatory but as a business, absolutely we were going to make the change because the liability is switched to us starting October 1st, we want to do everything we can to mitigate the risk," Mitchell says.
Experts say if a financial institution fails to provide a chip card to a customer after that October cut-off, it will likely be liable for any fraudulent activity. If you still haven't received your new card, you should contact your bank.
Experts say it will cost businesses between 500 to $1,000 for the new card readers.
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