We are now only six weeks away from a major shift in financial risk that affects every small business that accepts credit card payments. Yet many small business owners are still unaware of the change or have not considered the immediate impact of this fundamental change in their business.
Beginning October 1 2015 a business that accepts a stolen or forfeited credit card is fully liable for the financial risk. Credit card companies will no longer offer a guarantee of payment under these circumstances.
The key points to consider:
- Does your business take credit card payments from people you do not know?
- Are these credit card payments for large amounts?
- What would it mean to your business if a credit card payment turned out to be denied?
The best course of action depends largely on how you answer these questions. Businesses that take a high number of small dollar transactions can likely just wait until the new security hardware is available. Firms that take few high dollar transactions may prefer to add procedures that more completely check a customer’s background and creditworthiness.
I urge the owners of affected small businesses to discuss this change with your accountant now to help develop an effective response before October 1.