A majority of small business owners are unaware of the impending EM liability shift coming in October. Less than half of small business owners who accept point-of-sale card payments today report being aware of the October 1 liability shift, the date when a card issuer or merchant that does not support EMV chip card technology will assume liability for any fraudulent point-of-sale card transactions.
When asked if they plan to upgrade their point-of-sale credit card terminals to accept EMV chip cards, just 29 percent of business owners said they intend to make the change before the Oct. 1 deadline. Another 34 percent of business owners reported they will at some point in the future after October, and 21 percent say they never plan to upgrade.
Wells Fargo has pursued a series of actions to build awareness, prepare small businesses for the EMV liability shift and encourage business owners to adopt EMV chip-card technology, including providing EMV-capable equipment to customers since 2012. In addition, today, all new and re-issued Wells Fargo Business Credit Cards and Business Elite Cards provided to customers are chip-enabled. Wells Fargo also is offering business owners a number of resources, including:
• Proactive outreach to Merchant Services customers to help them understand their EMV-enabled payment options, and potential liability.
• Dedicated expanded support through its customer contact center.
• Educational articles, videos and infographics on wellsfargoworks.com that offer useful tips on the process and benefits of accepting EMV chip card payments and the importance of EMV chip cards and reducing fraud.
• Webinars and presentations to industry groups and associations on EMV and related fraud topics, and communications to business owners including EMV newsletter articles.
In the survey, some of the top reasons business owners said they do not plan to swap their terminals before October include:
• Forty-eight percent feel that upgrading their payment terminal will not impact their business.
• Forty-six percent do not want to pay for the costs associated with upgrading.
• Forty-one percent are not concerned about the liability shift in the case of fraud.
The survey shows business owners also are divided about whether the liability shift will reduce fraud for businesses, the main objective of EMV chip-enabled cards. Forty-two percent feel it will improve protection from fraud, and 42 percent feel it will not improve protection from fraud.
Despite the split between businesses that intend to upgrade their payment terminals to accept EMV chip cards and those that don’t, small business owners share one commonality: check or cash is still the preferred method of payment. In the latest Wells Fargo survey, business owners were asked about the type of payments their business currently accepts, some of the key findings include:
• Check or cash: Ninety-four percent of small business owners say they accept check or cash as a method of payment.
• Card payments: Forty-one percent of business owners surveyed accept debit card payments and 35 percent accept point-of-sale credit card payments.
• Mobile: Among small business owners surveyed, just 15 percent take payments in-person via a mobile-enabled credit card reader.
• Online: When it comes to online payments, a quarter of business owners (25 percent) accept payments online via credit card and 19 percent say that their business accepts online payments through a payment provider such as PayPal or Google Checkout.
In the quarterly survey, that also asks business owners about their present financial situation and outlook on the future, small business optimism dipped to 59 in July, down from 64 in April and from 71 January, representing the first time the score has decreased in two consecutive quarters since 2012. While not a significant change from last quarter, the modest decline in both April and July follows a significant jump in small business optimism at the end of 2014 and early 2015.
When business owners were asked to identify the most important challenge they face, several concerns were top of mind in the July survey. Business owners said their biggest concern was attracting customers and finding new business (14 percent), followed by government regulations (11 percent) and hiring and retaining quality staff (10 percent). These challenges have been consistently reported as top concerns of small business owners since early 2013, when the question was added to the survey.
For data, background and forecasts on EMV: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).