Slow Transition for a Big Change to Chip Card Processing
Most companies now have chip card readers, but some have been slow to implement the new technology. The United States began accepting chips on credit cards on October 1st, 2015. This also made merchants responsible for fraudulent charges made at their establishment if they did not have working chip readers. Financial institutions also became liable for fraud if they did not provide their customers with chips. The U.S. adopted this technology after many data breaches and credit card crime, as Europe had already begun in the 90’s. What is causing the slow implementation? Slate.com gives us insight on the slow process and steps into these new cards.
- The timing of an October implementation scared large businesses. This is the beginning of the Holiday shopping season and they were wary of starting a new large systematic change during their busiest season. The process would be new to customers who are generally in a hurry to get their purchases made and go, and it may pose a frustrating task for both consumers and employees. Also, any initial problems with transaction could cost the company money during this heightened sales time.
- Switching systems is a multi step process. Each terminal costs $500 each, and then they must install the software for each terminal. Each company then has to be certified by the banks and every card network that they accept at their establishment. For example, if the business does not accept American Express, they would not have to clear it with them, but if one accepted all major cards, each would need to be contacted.
- Small businesses are slow to get going because they do not see as much fraud, and are less motivated to spend the money for the new systems. They will eventually get there, but it will be a slower transition. When fraud is not a huge concern for their business or customers, it is not quite worth the money, time and strain to get chip readers right away.
Soon enough, all businesses will be utilizing the chip card reader as every consumer will have brand new chip cards. Swiping will be a thing of the past, in hopes of cutting down on data breeches and fraudulent charges.
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