U.S. minority-owned firms as reported by the Minority Business Development Agency generate $1 trillion to the U.S. economy and add roughly 5.8 million jobs on a yearly basis. Top industry sectors represented include agriculture, utilities, manufacturing, wholesale, information, finance and insurance, accommodation and food services, healthcare, social assistance, and more.
However, minority-owned firms, which play an integral part in the country’s economic growth, could be among the vast majority of owners not aware of the approaching EMV liability shift and its implications. EMV is short for Europay, Mastercard and Visa standards, which is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.
According to FirstData.com, over 70% of data security breaches are targeted at small businesses, and it’s rare that the affected business discovers the breach. These fraudulent activities are typically detected by a third party (banks or card associations) or law enforcement agencies. What follows after the breach of payment data are a string of costly and inescapable actions which can permanently cripple a business.
Wells Fargo/Gallup conducted a survey that revealed that small business owners are generally not ready for the EMV card conversion. The survey also contains important, need-to-know items for small business owners to help them avoid credit card fraud.
As of October 1, credit card companies will no longer be liable for credit and debit card fraud on card-present transactions. The card issuer or merchant, who does not support EMV, will assume liability for counterfeit card transactions that occur. This can have a huge impact, as reported by First Data.com, on the bottom line and reputation of a small business, and leads to lost time and money disputing fraudulent claims.
A majority of small business owners are simply unaware of the EMV card conversion. Less than half, or 48%, who accept point-of-sale payment (POS) know about the impending liability shift, and just 29% say they plan to upgrade their POS credit card terminals to accept EMV chip cards before the October 1 deadline.
How do you protect your small business from a costly risk involving both debit and credit cards? Attend webinars and presentations to industry groups and associations on EMV and EMV-related fraud topics, and read communications to business owners, including EMV newsletter articles.
Check out Wells Fargo’s website, which features educational articles, videos, and infographics that offer useful tips on the process and benefits of accepting EMV chip card payments, and the importance of EMV chip cards in reducing fraud. More importantly, contact your financial institutions. Banks are already issuing EMV chip-enabled credit and debit cards to prepare for the shift.