Beginning today, businesses that accept credit card payments must be equipped to receive charges from chip-embedded cards or face liability for fraudulent transactions.
The credit card industry set Oct. 1 as the day when liability for fraud committed with the new cards will shift to retailers and other businesses if they don’t have equipment to process chip card transactions. The chips in the cards are harder to counterfeit than the magnetic strips on millions of cards, but they require upgraded software to process transactions. If a counterfeit card is used in a transaction and a business does not have the new equipment, the company is liable for the financial losses it suffers.
Although many national retailers have upgraded their equipment, many small businesses have not.
At Smoke Stack, a cigar and craft beer retailer in West Point, employee Phillip Portera said his business is equipped to take chip-embedded charges — not that he thinks any one has noticed.
“I think most customers don’t really know whats happening with the cards,” Portera said.
He said Smoke Stack got new card reading machines this year, which are capable of handling chip-embedded transactions. As opposed to swiping the card through the machine, patrons with chip cards will insert the card into a slot at the bottom of the machine. Portera said he hasn’t noticed many customers taking advantage of the new technology.
Employees at Military Hardware in Columbus told The Dispatch the business did not yet have machines that can read chip-embedded cards.
Those results are typical nationwide, where little is expected to change for small businesses.
A number of banks and other card issuers still haven’t sent the new cards to their customers, who will continue to use their magnetic strip cards. It’s expected that millions of the older cards will still be in use going into 2016. And at least for the time being, it’s not expected that thieves will have figured out how to copy the information on the chips.
A Wells Fargo & Co. survey taken during the summer showed that only about half of small business owners were aware of Oct. 1 deadline. Only about a third had the new equipment and less than a third said they planned to get it by the deadline. Over time, many companies may feel more pressure to update their equipment.
The Associated Press contributed to this report.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 41 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.