Business Trends

 

02 02 2017

02 02 2017

Why EMV Card Reader Adoption is Slow for Small Businesses

It’s been more than a year since EMV adoption became law of the land.

Well, not the law, but since Oct. 1, 2015, retailers that haven’t adopted EMV-chip card readers risk liability for any fraud that occurs during point-of-sale transactions in their stores. Since that deadline, EMV adoption in businesses around the world has grown exponentially, but there are still many stores that do not use the technology. EMV adoption has been slower than expected – particularly in the U.S. – for a variety of reasons such as lack of knowledge about the technology and the benefits it can provide to small businesses.

Here is a brief look at EMV adoption and what its future looks like in 2017 and beyond:

Since the deadline

Beginning Oct. 1, 2015, fraud liability shifted from banks and other financial institutions to merchants for any credit cards that were hacked during point-of-sale purchases at their store. Despite this harsh deadline, many retailers took a while before adopting EMV technology, and some businesses still do not use the updated card readers. But the slow adoption of EMV isn’t solely the responsibility of business owners.

Many consumers didn’t even have EMV-enabled credit and debit cards by the time the deadline had passed. A mere 25 percent of cards were enabled with EMV technology by the end of 2015, according to Pulse’s 2015 Debit Issuer Study. Throughout 2016, EMV adoption slowly picked up steam, but the U.S. still lags significantly behind other countries when it comes to widespread EMV implementation and usage.

Approximately 1.75 million Visa merchants now use EMV-enabled card readers in the U.S., according to Business Insider. While this might seem like an impressive number, it only accounts for 38 percent of retailers nationwide. Globally, the rates of EMV usage are much higher.

In Northern, Southern and Western Europe, EMV cards accounted for more than 97 percent of all card-present transactions between July 2015 and July 2016, the Credit Union Times reported. Similarly, EMV cards made up nearly 90 percent of transactions in Africa and the Middle East, not quite 90 percent in Canada, Latin America and the Caribbean, 75 percent in Eastern Europe and nearly 58 percent in Asia.

Despite the slow movement to adopt EMV in the U.S., many merchants who have made the transition have noticed a substantial decline in fraudulent point-of-sale transactions, according to USA Today. Among the 25 retailers that were experiencing some of the highest rates of fraud at the end of 2014, those that implemented EMV card readers into their stores saw a decrease in fraud of more than 18 percent by the end of the 2015. In contrast, some of the retailers that did not upgrade their systems saw an increase in fraud of more than 11 percent over that same time frame.

Business owners who are unsure about whether they can afford the cost of an EMV upgrade should consider applying for a small business loan from an alternative lender. Entrepreneurs can get the cash they need quickly and without the hassle of applying through traditional lenders such as a bank.

What is the future of EMV

Despite the relatively slow adoption so far, some experts expect 2017 to be a banner year for EMV technology. Professionals point to a variety of factors as signs that EMV cards have yet to reach their heyday.

One of the biggest indicators of EMV’s growing popularity is that there were 800 million chip-on-chip transactions in November 2016 alone, which is a 359 percent increase from the same period in 2015, according to Business Insider. Consumers also seem to be warming up to EMV cards because of the increased security they have over cards with a magnetic strip. According to a Visa survey, 35 percent of shoppers now think EMV cards are the safest way to make in-store purchases, Business Insider reported.

Fraudulent purchases also seem to be costing retailers more with each passing year. Credit card hacks cost retailers $32 billion in 2014, up from $23 billion the year before, Business Insider reported. Experts believe the spike in fraud might motivate retailers to make the upgrade to EMV card readers.

As EMV becomes more popular among brick-and-mortar institutions, some experts expect identity thieves to move online to continue their illegal activities. This will mean even as small business owners begin to feel more secure about their in-store transactions, they will have become more diligent to ensure that their online sales are protected as well.

For business owners who are concerned about the cost of beefing up their cybersecurity, alternative business financing is an easy way to get the necessary capital with a hassle-free, quick process. Applicants can get approved for money in as little as 24 hours without worrying about onerous lending requirements.

Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121.  Funding amount and credit approval is subject to a full credit profile review.