July 23, 2015 09:00 ET

Cayan Study Reveals Small Business EMV Sentiments, Adoption Drivers

Covering Fraud Cost, Customer Complaints Revealed as Potential Adoption Tipping Points

BOSTON, MA--(Marketwired - Jul 23, 2015) - With the EMV liability shift deadline less than three months away, 52 percent of small businesses will not be EMV-ready, and 37 percent of small businesses have no plans to accept EMV cards after the deadline. But that's likely to change. Cayan, The Payment Possibilities Company™, conducted a study in June, 2015 to find out what will tip the scale on EMV card acceptance.

Cayan surveyed 344 small business owners or managers. Each small business accepts credit or debit cards and employs fewer than 50 people. The study sought to determine what it would take for small businesses with no EMV plans to become EMV-capable after October 1, the deadline after which merchants will be liable for the cost of counterfeit card fraud if they're unable to accept EMV cards. To find out, Cayan examined three specific situations likely to occur at these businesses after the liability shift: covering the cost of fraudulent transactions, receiving customer complaints and hearing about another business experiencing fraudulent transactions. In the survey, small businesses were educated on the liability shift and the cost of upgrading to EMV. They were then asked whether experiencing the situation would drive them to become EMV-capable.

Surprisingly, the survey revealed that while many small businesses aren't yet convinced of the benefits of becoming EMV-ready before the deadline, most respondents admitted that experiencing the negative effects of not being EMV-capable after the deadline would convince them to make the upgrade. Significantly fewer small businesses would make the transition after hearing about other small businesses experiencing the negative effects of not being ready.

  • Of the small businesses with no plans to accept EMV cards, 63 percent said that covering fraud would drive them to become EMV-capable, with 47 percent becoming EMV-capable after covering as little as $100 or less in fraud.
  • In addition, 57 percent would become EMV-capable if consumers complain about not being able to dip their EMV chip card, with 40 percent upgrading to an EMV-capable payment system after receiving five or fewer complaints a week.
  • Only 16 percent of small businesses would become EMV-capable after hearing about another business being liable for fraudulent charges.

"When we talk to small businesses about the risk of card fraud after October 1, they aren't highly motivated to upgrade. However, when we start associating a dollar amount to the risk -- even $100 lost to covering fraud -- they are much more interested in becoming EMV-ready. The survey results reinforce our observation: Small businesses cannot afford to be on the wrong side of the liability shift," said Henry Helgeson, CEO of Cayan. "Our goal is to help small businesses understand the consequences of not upgrading and become EMV-ready before they risk losing a single dollar to fraud."

The study also revealed the danger of small businesses waiting for a fraud incident before becoming EMV-capable. Sixty percent of small businesses said they couldn't bounce back if they were required to cover a fraudulent charge out-of-pocket over $500. This is alarming, given that 52 percent of small businesses will not be EMV-ready by the liability shift deadline, and according to the 2014 LexisNexis® True Cost of Fraud Study, the average merchant suffered 133 fraudulent transactions in 2014.

In order to get small businesses on board before the deadline, some merchant service providers are selling the benefits of mobile payments over EMV, because new payment systems will allow businesses to accept both payment types. According to Cayan's study, this strategy does not match merchants' thinking. Sixty-three percent of small businesses have no plans to accept mobile payments -- double the number of small businesses with no plans to accept EMV.

A detailed report of the survey's findings can be found on the company's Insights blog. For more information on EMV, visit Cayan's EMV resource center.

About Cayan
Cayan™, formerly Merchant Warehouse, is the leading provider of payment technologies that give businesses a competitive advantage. From simple and reliable payment processing, to fully integrated, multi-channel customer engagement platforms, Cayan is continuously developing new ways for businesses to unlock the power of payments. Headquartered in Boston, the company has offices in the United States and Belfast, Northern Ireland. Cayan is one of the world's fastest growing payment companies. For more information, visit