BIRMINGHAM, Ala.—Small business are feeling the effects—in their wallets—from the switch to EMV.
The move to chip cards is proving to be costly for small merchants because they can’t get the volume discounts on the new POS equipment that big retailers get, the Associated Press reports. And they don’t have in-house tech experts to install the new systems.
Most estimates of transition costs for small companies vary from the low hundreds to tens of thousands of dollars due to the wide range of equipment used, explained Bill Hardekopf, CEO of LowCards.com. “If businesses don't meet the Oct. 1, 2015 liability shift deadline, they can be held liable for transactions made with phony chip cards.”
“This is one of the biggest nightmares merchants are going to face,” Michael Kleinman, owner of Centurion Payment Services, a company that processes credit and debit card payments, told the AP.
However, the concern comes at the same time one MasterCard's Jan McGrath says small merchants are now leading the way in retailers converting POS to EMV. LINK Many experts have predicted that small merchants will be the last to convert to chip cards due to their lack of knowledge of EMV and their businesses experiencing far fewer fraud attacks than big retailers.
Changing card readers and software isn’t something many small business owners will be able to do on their own. They’ll need to hire technology consultants who can charge $100 an hour or more to install the system and ensure it works, the AP reported.
Many companies have computer systems that do more than handle payments — they also manage inventory and customer and vendor information. It may make sense for companies with combined payment, inventory and other systems to separate the payment part to make them less vulnerable to hackers, Scott Shedd, a technology consultant with WGM Associates in Scottsdale, Ariz., told the AP—a move that could costs the businesses thousands of dollars.