Why businesses are not using credit card chip readers

Major credit card companies urged retailers last October to make the switch to credit cards that used chips, instead of magnetic strips to complete transactions. But many consumers have noted that they continue to swipe rather than insert their cards. Shoppers may be asked to swipe their cards even if they have a chip in them because many retailers have either not upgraded their systems or have not activated the chip readers.


Retailers are now responsible for any money lost owing to credit card fraud if they do not use a chip reader. While some large retailers have readers installed, not all of them are actively using the new terminals. The Electronic Transactions Association reports that 1.2 million out of about 8 million businesses in the U.S. are using activated chip readers.

For some, there is an issue with the compatibility between their software and the new system. For others, it’s because the cost of installing and using chip systems is simply too high. Some small businesses have actually found that the cost of installing new systems is higher than paying for fraudulent charges.

While many experts believe that chip card readers will be more widespread by the end of 2016, they also predict that consumers will continue to need to swipe their cards at some retailers for several more years. Either way, consumers themselves will not be responsible for any fraudulent charges.

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