After New Rule, More Small Businesses Adopt Chip Technology

Feb 24, 2016

After New Rule, More Small Businesses Adopt Chip Technology

After New Rule, More Small Businesses Adopt Chip Technology
by Coleen McMurray and Frank Newport

Story Highlights

  • 48% of small businesses that accept credit cards are now chip-enabled
  • This is up from 31% in August before new rules went into effect
  • Most plan on upgrading at some point in the future

PRINCETON, N.J. -- About half (48%) of small-business owners who accept credit cards now have chip-enabled systems in place. This is up from 31% in the third quarter of last year, just before new rules on liability for credit card fraud committed at point-of-sale card readers took effect in October.

Trend: From what you know, is your credit card processing system currently chip-enabled?

The new rules transfer liability for fraudulent transactions from the payment card companies to the businesses unless they have upgraded to an EMV-enabled system (Europay, MasterCard, Visa) that accepts chip-enabled credit or debit cards. About three in 10 small-business owners interviewed as part of the Wells Fargo/Gallup Small Business Index survey accept credit or debit cards for payment at a traditional point-of-sale terminal.

Most small-business owners who accept credit card purchases but have not yet upgraded say they will upgrade at some point in the future. Thirty-six percent of these owners plan to upgrade in the next 12 months, while 41% do not have a specific date in mind. Additionally, 20% say they never plan to upgrade to chip-enabled processing equipment.

Looking ahead, do you plan on upgrading your card processing system to begin accepting chip-enabled cards, and if so, when?

Implications

Small-business owners who accept point-of-sale credit card purchases needed to be in compliance with the mandate beginning in October 2015, or risk being held liable for fraudulent purchases using non-chip-enabled equipment at their places of business. While compliance has increased since last year, about half of owners who accept credit and debit cards have not yet upgraded their equipment -- although most say they will at some point in the future.

Survey Methods

Results are based on telephone interviews with 600 U.S. small-business owners in all 50 states, conducted Jan. 11-15, 2016. For results based on the total sample of small-business owners, the margin of sampling error is ±4 percentage points at the 95% confidence level.

For results based on the sample of 245 small-business owners who currently accept payments via point-of-sale credit or debit cards, the margin of sampling error is ±7 percentage points at the 95% confidence level.

For more information about Wells Fargo Works for Small Business, visit wellsfargoworks.com. Follow us on Twitter @WellsFargoWorks.

Learn more about how the Wells Fargo/Gallup Small Business Index works.

Posted in Dr. Ken Hardwood.