Many of the nation's largest retailers made the switch to EMV late last year as the liability shift from the world's top payment processors went into effect. However, the vast majority of smaller merchants haven't taken that step yet, and some experts believe that it could be due to widespread misconception about the supposed costs of adoption versus the very real benefits. As such, it's thought that a little education on this front could go a long way for retailers, consumers, card issuers, and payment processors alike.
Anecdotal evidence tends to suggest the reasons that most small businesses cannot or simply have not adopted EMV-capable point-of-sale devices are numerous, according to a report from Payments Source. Some say that they haven't heard from the companies that issued their card readers about making the switch. Others may have heard about the importance of doing so but are holding out for financial reasons. Still more could be reticent because they believe consumers will not take advantage of the new payment option.
A stark reality
However, it's worth noting that when small businesses continue to do business without having adopted EMV, they do so at their own financial peril, the report said. The problem with not adopting EMV is that it leaves them vulnerable to payment fraud that those who have made the switch no longer face. In fact, those that haven't switched over may now be targeted more often by criminals looking to make fraudulent purchases. One recent survey from the Strawhecker Group found that in the fourth quarter of last year, the losses related to chargebacks on fraudulent purchases at small and medium-sized businesses increased 15 percent on an annual basis.
It's not necessarily easy to say correlation (the increase in fraud suffered by small businesses) is equal to causation (many larger companies adopted EMV and saw their fraud numbers decline) in this case, the report said. But if the trend continues, that starts to present even more evidence why smaller merchants should adopt EMV as soon as they can.
Further, many small businesses may be a little concerned about adopting EMV because they've heard that consumers don't like it. While early polls suggested that was true, much of the frustration that arose as a result of this payment platform was often because it takes longer than simply swiping a card in the traditional fashion. Fortunately, both Visa and MasterCard are expected to roll out technology that will dramatically speed up that process. That, in turn, could help to assuage consumers' initial frustrations with the EMV shift and help to get them onboard with using that payment method more regularly in their everyday lives.
For this reason, small businesses may be wise not only to take on EMV themselves, but also talk to their customers on a regular basis about why the change was important. The added security these transactions bring to the payments ecosystem ends up being quite beneficial for all involved, including customers.