The House Small Business Committee recently held its second hearing examining the so-called "EMV Deadline" and what it means for small businesses. At this hearing, the Committee heard from small business retailers who shared stories of an expensive, confusing transition to EMV.
"The EMV Transition is overwhelming and expensive for an independent, small retailer," Keith Lipert, owner of the Keith Lipert Gallary, told the committee, adding that small retailers are "entirely at the mercy and whims of the big players. We have no say and no way to use the marketplace to make our objections heard and our concerns valued." Banks, processors, and suppliers are not doing an adequate job informing retailers of their options, Lipert also said.
The hearing followed an Oct. 1, 2015, deadline set by the payment card industry for merchants to install chip-card readers or potentially face increased fraud liability. Importantly, the EMV shift is not mandatory for anybody. Instead, the shift operates as an incentive for merchants and for card issuers to acquire EMV technology. Businesses that do not have the new technology in place after Oct. 1 will be on the hook for any fraudulent transactions or security lapses. (Automated fuel dispensers have until 2017 to make the shift to EMV.)
NATSO is working closely with other stakeholders to tout the benefits of chip-and-PIN technology as a more secure means of protecting against data theft than the chip-and-signature requirements associated with the EMV shift.
According to Ed Mierzwinski, consumer program director and senior fellow at the U.S. Public Interest Research Group who testified on Capitol Hill last week, said, "there is no doubt that chip and PIN is safer than chip and signature." Banks and card networks, however, have chosen not to require chip and PIN because they "make more money from signature transactions."
Whether specific retailers should make the switch to EMV is ultimately a business decision that only they can make. Some experts think that switching to EMV is a questionable value proposition in light of the fact that retailers will retain liability exposure and remain vulnerable to data breaches even if they do implement EMV. At the same time, many merchants are switching to EMV technology now to minimize exposure.
NATSO has prepared a detailed Q-and-A document providing more information on the costs and benefits associated with switching to EMV compliant technology. That document can be read here.
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