Just $50 in Fraud Would Motivate 32% of Small Businesses To Adopt EMV

What will it take to get small businesses to accept EMV payment cards? Apparently $50 in fraud charges will motivate 32% of them to install EMV-capable point-of-sale terminals. That’s the finding from a survey released Thursday by Cayan, a Boston-based payments company.

While 32% said $50 when asked what amount of fraud would drive a small business to become EMV-capable, most—38%—said no amount. That is indicative of a general assumption that many small business owners are little interested in the chip card technology. Fifteen percent said it would take $100 in fraud for them to install EMV-capable equipment, while 10% said $500 in fraud and 5% said $1,500 in fraud.

Come Oct. 1, merchants will bear liability for counterfeit and lost-and-stolen fraud if they can’t accept EMV chip cards.

These survey results might indicate a lack of awareness among merchants, says Ben Saren, Cayan senior vice president of marketing.

“A couple things are at play here,” Saren tells Digital Transactions News via email. “As it's been well documented, many small businesses aren’t necessarily aware of EMV or the direct impact it has on their business. It's likely that many who responded that 'no amount' of liability would be a motivation for upgrading to EMV need some education into why not having EMV can end up costing them more in the long run. Put in context, it's not surprising to see that about a third of small businesses were suddenly motivated when they realized that they would be on the hook for $50 in fraud liability charges. Many small businesses operate on tight budgets and as soon as they see something creeping into their ability to turn a profit, they are motivated to fix that problem.”

Most of the 344 small business owners in the survey —43%—also said customer complaints that they don’t accept chip cards would convince them to install compatible POS terminals. Only one complaint per week would spur 24% of merchants, but it would take 5 complaints for 16% of merchants to do so. Nine percent said they would need to receive 10 weekly complaints, and 8% said there would need to be 20 or more complaints.

The survey also found that only 40% of merchants would be able to recover from $500 or more in fraud.

“Small businesses have to be scrappy and competitive to stay alive and do well,” Saren says. “They quite often aren’t sitting on huge piles of cash and see exactly how their bottom line will be affected by unexpected items costing them hundreds of dollars.”