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EMV deadline eight months away. Who’s ready?

SBA chief wants all small businesses to respond

EMV deadline eight months away. Who’s ready?

With the EMV liability switch just eight months away, it is imperative now to make sure all of the country’s 28 million small businesses are aware of what’s at stake.

“We need to create a sense of urgency around Oct. 15,” said Maria Contreras-Sweet, administrator of the Small Business Administration, in an impassioned speech during the White House summit on cyber security and consumer protection at Stanford University.

On Oct. 15, liability for fraud connected with a point-of-sale credit card will apply to the party in the transaction—financial institution, card issuer, or business—that does not use the EMV, or chip-and-PIN technology.

Awareness level low

While most banks and big-box retailers are well on their way toward migrating to the new technology, many small businesses not only are not equipped for it, but are barely aware of it.

“I’m a former small business owner, and I’m a former commercial banker, so I understand sensitivities on both sides of this issue,” Contreras-Sweet said. “Fraud is a crime, and ultimately we want the criminals to pay. Our goal with EMV is not to shift liability around the market. It’s to drive fraud out of the market.”

The SBA chief added: “There’s a reason why America has 25% of the world’s credit card use but 50% of the world’s credit card fraud. We’re years behind the curve with those black magnetic strips.”

SBA will partner with Square—which produces a line of point-of-sale devices intended mainly for small businesses—on a national awareness drive. Messages will be conveyed online, through television and radio spots, and in personal visits to businesses.

“Small businesses can’t afford to be behind the curve while their larger competitors move forward with technology upgrades, so we have to spread the word,” she said. “We’re going to educate small businesses on the transition to EMV  cards…Our message to small business owners is that they must take care of their customers’ personal and financial data as if it were their own,” she said.

John Ginovsky

John Ginovsky is a contributing editor of Banking Exchange and editor of the publication’s Tech Exchange e-newsletter. For more than two decades he’s written about the commercial banking industry, specializing in its technological side and how it relates to the actual business of banking. In addition to his weekly blogs—"Making Sense of It All"—he contributes fresh, original stories to each Tech Exchange issue based on personal interviews or exclusive contributed pieces. He previously was senior editor for Community Banker magazine (which merged into ABA Banking Journal) and for ABA Banking Journal and was managing editor and staff reporter for ABA’s Bankers News. Email him at [email protected].

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