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News & Press: WIPP Legislative Updates

New Credit Card Requirements Sneak Up on Small Businesses

Monday, October 26, 2015  
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New Credit Card Requirements Sneak Up on Small Businesses

 

Does your business accept credit cards? Have you prepared for the changeover to the Europay – MasterCard - Visa (EMV) chip system to process credit card transactions? If not, your financial services providers will no longer be liable for instances of credit card fraud, your business will be.

 

The House Committee on Small Business held a two-part hearing, offering interesting, and often contrasting, perspectives on this issue. At the first hearing, representatives from the financial industry praised the upgrades and highlighted the protections that the EMV chip system offers. The second hearing, featuring small business owners that need to implement these changes, revealed a much more complex situation. While witnesses at both hearings and the Committee members generally agreed that the EMV system offers more sophisticated fraud protections, implementing these modifications is a significant burden for small businesses.

 

Despite the outreach efforts of financial firms, small business owners are generally not aware of these changes. According to a recent study about preparedness for this changeover, less than half of small businesses were aware of the October 1st changeover deadline and liability shift.

 

Small businesses will have to purchase equipment to process sales using the new chips, but the required upgrades do not stop there. Integrating the new technology with point-of-sale terminals, inventory management tools, and other systems could exponentially inflate costs. Given integration, software upgrades, training, and ongoing maintenance, a quick and easy changeover is unlikely.

 

To learn more about the requirements of this changeover, the Small Business Administration (SBA) has provided several resources for small businesses. 


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