BEND, OR -- Credit card customers are already receiving new plastic featuring an encrypted computer chip, but a new study shows many small businesses may not be aware of the ramifications if they aren’t prepared to accept the new EMV cards.
Kyle Frick with Mid-Oregon Credit Union in Bend explains how it works. "The EMV chip has a security feature that basically takes your data information, encodes it, sends it off into a packet then it comes back and approves the card, so it takes a little longer. So, when you stick your EMV chip card into the reader, it’s going to sit there for a couple of seconds and it’s going to do all this stuff and then it’s going to com back and say approved, rather then just a quick swipe."
However, according to a new survey conducted by Wells Fargo this month, less than half of small businesses that accept credit cards know about a shift in fraud liability. Frick says his institution is motivated to make the switch. "The liability currently is with the financial institution that carries the card. But, when we get to October, whoever has the higher level of security, that’s the one that will not be liable for any fraud or breach. It makes sense that, who’s protecting your information the best is not liable for it."
Businesses must upgrade card readers to use the EMV function, and the Wells Fargo survey revealed fewer than half of small businesses that accept credit cards were even aware of the shift in liability. Only 29% said they would upgrade machines before October first, and another 21% said they never plan to upgrade.
