Many small business owners have already switched to EMV chip-based credit and debit cards, but despite the many security safeguards and other benefits, there are still some who haven’t yet made the switch.
In a time when data breaches can wreak havoc with the largest Fortune 500 companies, why do some business owners still believe they don’t need to make the switch?
1. They Don’t Understand How EMV Technology Protects Business Owners and Customers
“Many small businesses are not technology-savvy and we suspect the logic goes like this: ‘I accept the card with the chip, I swipe it, so yes I am EMV compliant,'” said Tim Sloane, vice president of payments innovation at Mercator Advisory Group.
Sloane added that small merchants who haven’t upgraded face the greatest risk of as fraudsters continue looking for locations where counterfeit cards can be used.
“The risk to a dry cleaner or candy store is obviously relatively small, but a liquor store or department store could easily become targets,” Sloane said. “One criminal could drive a significant loss for the merchant and a criminal organization could put that merchant out of business.”
2. They Are Willing to Accept the Risks
Some business owners believe EMV can’t protect them from every type of fraud or scam so why invest the time and money to adopt it? Payment Source Magazine compares those who haven’t adopted EMV to drivers who still aren’t wearing seat belts. While they may get away with it for a while, they will eventually be fined or find themselves in an accident. Even though PCI compliance is mandatory for all businesses that accept card payments. EMV is not mandatory but that doesn’t mean you don’t need it.
EMV technology requires chip cards that help reduce fraud by encrypting information between the card and card reader. Older magnetic stripe cards contain data that’s easy to intercept, steal and spoof. Even though industry experts believe US retailers are on track to reach 99 percent adoption of EMV technology by the end of the year, some business owners are skeptical. Lagging behind in state-of-the-art EMV technology could leave retailers and others without strong security protections financially responsible for chargeback fees and other damages to their business.
3. They Aren’t Paying Attention to Customer Preferences
The Wall Street Journal reports that more millennials are using credit cards to manage their finances and make most everyday transactions. According to research in the ways millennials use credit and debit cards, younger consumers are concerned about digital security, and a good user experience.
They expect to engage, interact and transact with friends, family, brands and even their money digitally, and they want to do so in simple and safe ways. A spokesperson for MasterCard told the Journal that some of its internal research found that nearly 60 percent of millennials in the U.S. would like to be able to make payments by scanning their smartphone.
“Everywhere EMV is rolled out, fraud has declined in a very significant way, even in the U.S.,” said MasterCard CFO Martina Hund-Mejean.
Chip-card technology and other emerging technologies that will allow users to make quick and secure digital transactions as well as the adoption of new mobile payment technologies is one way to attract and keep new tech-savvy customers.Back To Blog