Wells Fargo Survey: Many Small Businesses Not Ready for EMV Chip Cards

  • Less than half of business owners who accept point-of-sale card payments are aware of upcoming EMV liability shift in latest Wells Fargo/Gallup survey
  • Wells Fargo provides resources to help business owners understand and prepare for EMV changes

Less than half of business owners who accept point-of-sale card payments are aware of upcoming EMV liability shift in latest Wells Fargo/Gallup survey (Graphic: Business Wire)

SAN FRANCISCO--()--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.

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





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 (NYSE: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.

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Wells Fargo & Company
Jim Seitz, 612-328-6221
Sarah DuBois, 612-466-7484


Wells Fargo & Company
Jim Seitz, 612-328-6221
Sarah DuBois, 612-466-7484