Business in different stages of transitioning to chip-based credit cards

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COLUMBIA – It’s already been over four years since the U.S. began the transition of credit cards from the magnetic strip to the EMV chip but it’s far from over.

One Columbia resident was growing impatient because it's still not always clear which system a business uses.

“It’s kind of frustrating because automatically you swipe and they are like ‘Oh wait, no we have a chip reader now’, then you insert it and it just adds on to the whole process,” Sade Howell said.

The Central Bank of Boone County said there’s currently no mandate to force businesses to switch to the EMV chip technology, but banks have introduced incentives.

Oct. 1 marks one year since banks first introduced the a shift in liability for credit card transactions. 

The liability shift affects businesses because, if fraud occurs, it makes the party with the least chip compliant technology pay. In other words, if the business hasn’t updated its technology, it will pay the fraudulent transaction.  

For bigger corporations, like Walmart and Target, the liability shift encouraged them to switch because they deal with fraud more often.

For local businesses, it isn’t always that simple. According to the EMV Migration Forum, the cost of one chip-reading terminal for a business can range anywhere from $500 to $1,000.

Rally House Columbia hasn’t updated its technology yet because of that.

“We’re not a huge company, so sometimes it doesn’t pay if people still aren’t using it. I just don’t think it pays for us to spend that money on it,” Manager Karista Bierly said.

But the vice president for Consumer Banking at Central Bank of Boone County said smaller businesses should worry about the shift.

“I think the liability shift is even more incentive for a small business owner," Angela Gentry said. "A single fraud transaction could make or break their business. For example, if someone fraudulently purchase several thousands of dollars in merchandise and we later find that the card was stolen. The card issuer is EMV chip compliant but the merchant isn’t. The small business owner is now responsible for that loss.”

ACME Columbia made its upgrade soon after the shift occurred.  

“We got the new technology in spring of 2015,” said manager Mitchell Gerringer. “We started using it in every transaction probably more summer of 2015. We started slowly implementing it, but now a lot more people are using it.”

Sub Shop General Manager Scott Schulte said he was offered another incentive to make the change.

“With the chip, it’s a cheaper rate for us every time someone uses that as opposed to punching it in manually or even swiping it,” Schulte said.     

Some new businesses never get a swipe machine in the first place, such as Fortuity, a clothing store in downtown Columbia.

“When we opened this store we got the newest technology. You have to insert the chip, which takes a little longer than actually swiping the debit or credit card without the chip, but it’s worth it,” manager Kristen Chase said.

The EMV Migration Forum estimates 50 percent of EMV terminals will be enabled by the end of 2016, and 90 percent by the end of 2017.

However, the Central Bank of Boone County said the old technology may never be completely phased out.

“We expect to continue to see magnetic strip cards. Some merchants may not choose to upgrade their merchant machines and will need a way to continue to accept cards for payment,” Gentry said.