Do Small Businesses Really Need Chip Card Readers?

Chip Card Readers

Chip cards readers, also known as EMV (or “Europay, MasterCard and Visa”) cards, are designed to use state-of-the-art technology in an effort to combat one of the biggest expenses that retailers face today: fraud. Many leading financial institutions have already begun issuing debit and credit cards to consumers with these cards built-in, which themselves are designed to make it easier to prevent a person with malicious intentions from creating a fraudulent copy of that card using something like a skimmer.

The actual level of success regarding fraud prevention with chip cards is something that is currently up for debate. While chip cards do go a long way towards preventing duplicate copies of a consumer’s debit or credit card from being made, this will not stop fraud associated with online purchases or other situations where a card is not required to be present, for example.

How Do Chip Cards Change Things for Retailers?

The switch to chip cards brings with it a number of different implications for retailers, including things like:

  • The requirement of new chip card readers to successfully process the cards themselves.
  • New internal payment processing systems.
  • New liability rules that shift the burden in fraud off of the bank and onto the retailer.

Important Information about Chip Cards

According to, there are over 1.2 billion credit and debit cards currently being used by consumers that either will be updated to chip cards or have already been by January 1, 2016. This means that there are also an estimated 12 million point-of-sale systems across both the United States and Europe that will need to be upgraded to accept the new technology present on the cards. The average cost of just one point-of-sale terminal that is compliant with new EMV rules and regulations is between $500 and $1000.

Do Small Businesses Really Need a Chip Card Reader?

Much has been written about the deadline of October 1, 2015, which was the date by which all merchants were supposed to have new chip card readers in place at all of their stores. This date has come and gone and not all small businesses have made the shift. It’s important to note that businesses are not in violation of any laws if they haven’t switched over yet, but the actual implications of the deadline may be much worse depending on your perspective.

As of October 1, 2015, all liability for fraud falls onto the small business rather than the bank as has been the case in recent years. This means that if a fraudulent purchase occurs, the business will have no way to actually combat the issue with a particular financial institution. This is true regardless of whether the business has upgraded to a new chip card reader or not. When you think about things in those terms, the answer to the question of whether or not a small business really needs a chip card reader is a resounding “yes.”

For more information about helping small businesses protect their financial information, visit


CEO, Author of the #1 Risk to Small Businesses

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}