SAN FRANCISCO--(BUSINESS WIRE)--
A majority of small business owners are unaware of the impending EMV1
liability shift coming in October, according to the latest Wells
Fargo/Gallup Small Business Index conducted July 6-10.
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In the quarterly small business survey, less than half (49 percent) of
small business owners who accept point-of-sale card payments today
report being aware of the October 1 liability shift, the date when a
card issuer or merchant that does not support EMV
chip card technology will assume liability for any fraudulent
point-of-sale card transactions. To meet the October 1 deadline,
financial institutions are issuing EMV chip-enabled credit and debit
cards, which are designed to protect against fraudulent transactions by
encoding cardholder information within an encrypted microchip and data
that changes with each transaction, and merchants are converting to new
card readers or adding EMV capability to their existing magnetic stripe
card reader payment terminals.
Among business owners who report accepting point-of-sale card payments,
only 31 percent say that their existing credit card processing system
accepts chip-enabled cards. When asked if they plan to upgrade their
point-of-sale credit card terminals to accept EMV chip cards, just 29
percent of business owners said they intend to make the change before
the Oct. 1 deadline. Another 34 percent of business owners reported they
will at some point in the future after October, and 21 percent say they
never plan to upgrade.
“While our industry has made great progress in the last year informing
and preparing small business owners for the EMV liability shift, the
survey findings show us that we have more work to do,” said Debra Rossi,
head of Wells Fargo Merchant Services. “At Wells Fargo we continue to
focus on providing business owners the support they need to get ready –
from reaching out to business owners who are directly impacted to
offering a wide array of resources that help business owners understand
EMV, its benefits and the impact of the upcoming liability shift.”
Wells Fargo has pursued a series of actions to build awareness, prepare
small businesses for the EMV liability shift and encourage business
owners to adopt EMV chip-card technology, including providing
EMV-capable equipment to customers since 2012. In addition, today, all
new and re-issued Wells Fargo Business Credit Cards and Business Elite
Cards provided to customers are chip-enabled. Wells Fargo also is
offering business owners a number of resources, including:
-
Proactive outreach to Merchant Services customers to help them
understand their EMV-enabled payment options, and potential liability.
-
Dedicated expanded support through its customer contact center.
-
Educational articles, videos and infographics on wellsfargoworks.com
that offer useful tips on the process and benefits
of accepting EMV chip card payments and the importance of EMV
chip cards and reducing fraud.
-
Webinars and presentations to industry groups and associations on EMV
and related fraud topics, and communications to business owners
including EMV newsletter articles.
In the survey, some of the top reasons business owners said they do not
plan to swap their terminals before October include:
-
Forty-eight percent feel that upgrading their payment terminal will
not impact their business.
-
Forty-six percent do not want to pay for the costs associated with
upgrading.
-
Forty-one percent are not concerned about the liability shift in the
case of fraud.
The survey shows business owners also are divided about whether the
liability shift will reduce fraud for businesses, the main objective of
EMV chip-enabled cards. Forty-two percent feel it will improve
protection from fraud, and 42 percent feel it will not improve
protection from fraud.
Small Business Payment Trends
Despite the split between businesses that intend to upgrade their
payment terminals to accept EMV chip cards and those that don’t, small
business owners share one commonality: check or cash is still the
preferred method of payment. In the latest Wells Fargo survey, business
owners were asked about the type
of payments their business currently accepts, some of the key
findings include:
-
Check or cash: Ninety-four percent of small business owners say
they accept check or cash as a method of payment.
-
Card payments: Forty-one percent of business owners surveyed
accept debit card payments and 35 percent accept point-of-sale credit
card payments.
-
Mobile: Among small business owners surveyed, just 15 percent
take payments in-person via a mobile-enabled credit card reader.
-
Online: When it comes to online payments, a quarter of business
owners (25 percent) accept payments online via credit card and 19
percent say that their business accepts online payments through a
payment provider such as PayPal or Google Checkout.
Small Business Optimism Remains Flat
In the quarterly survey, that also asks business owners about their
present financial situation and outlook on the future, small business
optimism dipped to 59 in July, down from 64 in April and from 71
January, representing the first time the score has decreased in two
consecutive quarters since 2012. While not a significant change from
last quarter, the modest decline in both April and July follows a
significant jump in small business optimism at the end of 2014 and early
2015.
“Despite the dip in optimism the past two quarters, small businesses in
general are healthier and in a better place today than a year ago,” said
Lisa Stevens, Wells Fargo’s head of Small Business. “A slight decline in
the Index score tells us that businesses are still facing challenges in
the marketplace, yet overall, we’ve seen an upward trend in business
owner confidence in their business that’s in line with the recovering
economy over the last 7 years.”
Business Owner Challenges
When business owners were asked to identify the most important challenge
they face, several concerns were top of mind in the July survey.
Business owners said their biggest concern was attracting customers and
finding new business (14 percent), followed by government regulations
(11 percent) and hiring and retaining quality staff (10 percent). These
challenges have been consistently reported as top concerns of small
business owners since early 2013, when the question was added to the
survey.
Small Business Index Key Drivers
Wells Fargo and Gallup survey small business owners across the nation
each quarter to gauge their perceptions of their present situation (past
12 months) and future expectations (next 12 months) in six key areas:
financial situation, cash flow, revenues, capital spending allocation,
hiring, and credit availability.
Wells Fargo/Gallup Small Business Index Scores: Q3 2014– Q3 2015
|
|
|
Overall Index Score
|
|
Present Situation
|
|
Future Expectations
|
Q3 2015 (surveyed July 2015)
|
|
59
|
|
23
|
|
36
|
Q2 2015 (surveyed April 2015)
|
|
64
|
|
24
|
|
40
|
Q1 2015 (surveyed January 2015)
|
|
71
|
|
28
|
|
43
|
Q4 2014 (surveyed November 2014)
|
|
58
|
|
21
|
|
37
|
Q3 2014 (surveyed July 2014)
|
|
49
|
|
18
|
|
31
|
About the Wells Fargo/Gallup Small Business Index
Since August 2003, the Wells Fargo/Gallup Small Business Index has
surveyed small business owners on current and future perceptions of
their business financial situation. The Index consists of two
dimensions: 1) Owners’ ratings of the current situation of their
businesses and, 2) Owners’ ratings of how they expect their businesses
to perform over the next 12 months. Results are based on telephone
interviews with 600 small business owners, with annual revenues up to
$20 million, in all 50 United States conducted July 6-10, 2015. The
overall Small Business Index is computed using a formula that scores and
sums the answers to 12 questions — six about the present situation and
six about the future. An Index score of zero indicates that small
business owners, as a group, are neutral – neither optimistic nor
pessimistic – about their companies’ situations. The overall Index can
range from -400 (the most negative score possible) to +400 (the most
positive score possible), but in practice spans a much more limited
range. The margin of sampling error is +/- four percentage points. The
highest Index reading was +114 in the fourth quarter of 2006, and the
lowest reading was -28 in the third quarter of 2010.
About Wells Fargo
Wells Fargo & Company (WFC) is a nationwide, diversified,
community-based financial services company with $1.7 trillion in assets.
Founded in 1852 and headquartered in San Francisco, Wells Fargo provides
banking, insurance, investments, mortgage, and consumer and commercial
finance through 8,700 locations, 12,800 ATMs, the internet
(wellsfargo.com) and mobile banking, and has offices in 36 countries to
support customers who conduct business in the global economy. With
approximately 266,000 team members, Wells Fargo serves one in three
households in the United States. Wells Fargo & Company was ranked No. 30
on Fortune’s 2015 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and help
them succeed financially. Wells Fargo perspectives are also available at Wells
Fargo Blogs and Wells
Fargo Stories.
Wells Fargo serves approximately 3 million small business owners across
the United States and loans more money to America’s small businesses
than any other bank (2002-2013 CRA government data). To help more small
businesses achieve financial success, in 2014 Wells Fargo introduced Wells
Fargo Works for Small BusinessSM– a
broad initiative to deliver resources, guidance and services for
business owners – and a goal to extend $100 billion in new lending to
small businesses by 2018. For more information about Wells Fargo Works for
Small Business, visit: WellsFargoWorks.com.
Follow
us on Twitter @WellsFargoWorks.
About Gallup
For more than 70 years, Gallup has been a recognized leader in the
measurement and analysis of people’s attitudes, opinions and behavior.
While best known for the Gallup Poll, founded in 1935, Gallup’s current
activities consist largely of providing marketing and management
research, advisory services and education to the world’s largest
corporations and institutions.
1 EuroPay, MasterCard, and Visa
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