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Local businesses affected by chip-embedded credit cards - KOAM TV 7

Local businesses affected by chip-embedded credit cards

Updated:
JASPER COUNTY, MISSOURI -

Tomorrow's the deadline for stores to have terminals that can read the new computer chip credit cards, aimed at increasing security. Visa and MasterCard set the deadline for stores, which would face consequences for not having the terminals. American Express set a deadline of October 16th.

Many stores still lack the terminals and many customers still lack their new cards. A recent poll finds only 27 percent of retailers have the new, more expensive card processors. A separate survey says 64 percent of credit card users have not yet received the new chip cards.    

But businesses that don't upgrade could now be on the hook for fraud.

For now they will continue swiping credit cards the way they always have, but the owners of Henkle's Hardware in Webb City will eventually have to make the switch to the new chip enabled card reader.

“I don't really think I’ll have a choice, it’s just a cost of business that they're going to put on us,” says owner John Henkle.

Currently, banks are liable for any fraudulent charges. But soon, retailers that do not upgrade the equipment will be responsible for those costs. The transition from magnetic strip cards provides consumers with a higher level of security.

“Every time you use these new cards it creates a unique transaction code different from the mac stripe that just has your card number on it,” says Amy Howe of Arvest Bank.

This makes it virtually impossible to create a counterfeit card. And while Henkle isn't too worried about fraud in his store, it is a common problem on a larger scale.

“It’s a problem nationwide, we get calls about it all the time, you know, how many times people lose their wallet or misplace their debit card,” continues Howe.

But, something local business owners do have to worry about is the cost of the new card readers.The Henkle's have found that one new piece of equipment can cost anywhere from $700 to $1,200.

“If I have to spend, you know, $3,000, I’ve got to make $3,000 to pay for it you know it’s just a cost of doing business,” says Henkle.

And while not everyone is on board yet, when it’s all said and done, the change should protect both retailers and consumers.

Consumers  will be inserting their cards rather than swiping them and should be cautious not to leave their cards behind. The new equipment also takes longer to process the transaction.

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