Report: Merchants With No Plans for EMV Upgrade will Change Tune When Faced with Fraud

July 27, 2015

Report: Merchants With No Plans for EMV Upgrade will Change Tune When Faced with Fraud U.S. card-not-present businesses have been waiting a long time to see if EMV implementation there will result in surging CNP fraud, as it has in other countries. A new study from payment provider Cayan, however, indicates they might have to wait even longer. Cayan, formerly Merchant Warehouse , said 52 percent of small merchants will not be EMV-ready by the looming October 1 deadline and 37 percent have no plans to accept EMV cards at all. Ignorance seems to be the biggest problem, since a little education has many owners reevaluating their position, said Henry Helgeson, CEO of Cayan.

“When we talk to small businesses about the risk of card fraud after October 1, they aren’t highly motivated to upgrade,” said Helgeson. “However, when we start associating a dollar amount to the risk—even $100 lost to covering fraud—they are much more interested in becoming EMV-ready. The survey results reinforce our observation: Small businesses cannot afford to be on the wrong side of the liability shift.”

Of the small businesses with no plans to accept EMV cards, the Cayan survey found 63 percent said that the experience of covering fraud would drive them to become EMV-capable. Forty-seven percent said being required to cover as little as $100 or less in fraud could drive them to upgrade. Sixty percent of small businesses said they couldn’t bounce back if they were required to cover a fraudulent charge out-of-pocket over $500.