SBA News: Small firms should adopt chip card technology

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SBA Region VIII Office

"A major transition is happening in America and small business owners who fail to act may pay a huge price. U.S. credit card companies have set October for the national adoption of chip cards (also known as EMV Cards).  Businesses that have not integrated EMV technology to process chip cards will become financially responsible for fraudulent transactions previously covered by the cardholder’s issuing bank."

- Stanley Nakano 

Roughly 90 percent of credit card terminals in Europe are now chip-enabled. The United Kingdom has seen nearly a 70 percent decline in counterfeit card transactions since making the transition, according to Barclays. Meanwhile, America has 25 percent of the world’s credit card use but 50 percent of the world’s credit card fraud, making the case to shift from antiquated swipe-and-sign to microchips on credit cards.

The U.S. Small Business Administration (SBA) is concerned that too many entrepreneurs in America are at risk of being left in the dark and on the hook. The majority of America’s small businesses will need to upgrade their payment systems, as only about 20 percent of payment terminals are currently equipped to accept chip cards, and most of these are at larger retailers. Accepting contactless payments also requires new technology for most businesses; a recent report shows that 87 percent of small businesses do not currently accept mobile payments. Depending on the cost of the goods and services that a small business sells, assuming fraud liability could have serious financial consequences.

Most small businesses do not have fraud departments and can’t afford to be behind the curve while their large competitors move forward with technology upgrades. That’s why the SBA partnered with Square to enhance payment security and to protect cardholder information. We’re educating small businesses on the transition to EMV (Europay, Mastercard, Visa) cards, so check out to make the switch.

Additionally, we rolled out a cybersecurity page for small employers at This includes an SBA self-paced online cybersecurity course and a free small biz cyber planner developed by the Federal Communications Commission (FCC) . We also plan to host additional regional small business cybersecurity workshops from our long-standing partnership with the FBI and National Institute of Standards and Technology.

It’s crucial to invest in EMV readers and other digital technologies to prevent cybersecurity fraud and protect the integrity of customers’ sensitive data. Many new EMV-enabled and contactless systems are just hitting the market. There are many affordable hardware solutions that will not break the bank of our small businesses. In fact, accessories to complement existing payment terminals are already available, with more coming online every day.

October is National Cyber Security Awareness Month; therefore, we hope your small business joins the movement to switch to EMV technology. It will prevent risk for your customers, and most importantly, protect your bottom line.


Stanley Nakano serves as SBA’s Acting Regional Administrator for Region VIII, overseeing all agency programs and services in Colorado, Montana, Wyoming, North Dakota, South Dakota, and Utah.