Time running out to be chip-ready

Published 6:47 pm Wednesday, October 28, 2015

By Natalia Olson-Urtecho

A major transition is happening in the United States, and business owners who fail to follow suit will pay the price.

October is National Cyber Security Awareness Month and a prime time to remind small business owners of U.S. credit card companies’ requirement this month for the national adoption of chip cards. Businesses not integrated with Europay, MasterCard and Visa technology to process chip cards will become financially responsible for fraudulent transactions previously covered by the cardholder’s issuing bank.

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Roughly 90 percent of credit card terminals in Europe are now chip-enabled, and since implementation, the United Kingdom has seen nearly a 70-percent decline in counterfeit card transactions, according to international financial services provider Barclays.

Meanwhile, America has 25 percent of the world’s credit card use but 50 percent of the world’s credit card fraud, making the case to shift from the antiquated swipe-and-sign method to microchips on credit cards.

The SBA is concerned too many entrepreneurs in America are being left in the dark and on the hook. The majority of America’s small businesses will need to upgrade their payment systems, as only about 20 percent of payment terminals are currently equipped to accept chip cards, and most of these are at larger retailers.

Accepting contactless payments also requires new technology for most businesses; a recent report shows 87 percent of small businesses do not currently accept mobile payments.

Depending on the cost of the goods and services a small business sells, assuming fraud liability could have serious financial consequences.

Small businesses don’t have fraud departments, and they can’t afford to be behind the curve while their larger competitors move forward with technology upgrades. That’s why the SBA is partnered with Square to enhance payment security and protect cardholder information. We’re educating small businesses on the transition to EMV cards at www.sba.gov/emv.

Additionally, we rolled out a cybersecurity page for small employers at www.sba.gov/cybersecurity with an SBA self-paced online cybersecurity course and a free small biz cyber planner developed by the Federal Communications Commission.

We’ll also host regional small business cybersecurity workshops from our long-standing partnership with the FBI and National Institute of Standards and Technology.

It’s crucial to invest in EMV readers and other digital technologies to prevent cybersecurity fraud and protect the integrity of customers’ sensitive data. There are many affordable hardware solutions that will not break the bank of small businesses.

In fact, accessories to complement existing payment terminals are already available, with more coming online every day.

Natalia Olson-Urtecho is the Small Business Administration administrator. She can be contacted via www.sba.gov.