NEW YORK — A majority of small-business owners are unaware of an impending shift that could leave them liable for fraud committed with a new generation of chip-embedded credit cards.
Wells Fargo & Co. in early July asked 600 small-business owners about the Oct. 1 deadline to get card readers and software to handle the new credit cards. Those without the right equipment could be liable starting Oct. 1 if a customer commits fraud with a chip card.
Only 49 percent said they were aware of the deadline.
The US credit card industry is switching to chip cards because it’s harder for thieves to counterfeit them than it is to make fake magnetic-stripe cards. Chip cards have been in use in Europe and Canada for more than a decade. Security experts say there is more fraud in the United States because of the prevalence of magnetic cards. Card issuers are still in the process of sending chip cards to their customers.
Most small-business owners haven’t switched to new card readers — just 31 percent. Thirty-four percent plan to upgrade in the future, and 21 percent said they don’t plan to get the new readers.
Forty-six percent of those who don’t plan to get new readers by the deadline said they don’t want to pay the costs, which can be in the thousands of dollars. And 41 percent said they’re not concerned about being liable if fraud is committed.