The cost of paying for fraudulent credit card transactions, previously covered by the credit card companies, shifted to the retailers themselves last October — unless they upgraded their payment terminals to accept new chip-based cards.
According an April report by The Strawhecker Group, small and midsized merchants saw a 31 percent increase in the number of chargebacks right after the liability shift took effect.
The shift was first announced in 2011, so merchants had plenty of time to upgrade, but few did.
In fact, today, eight months after the deadline, only 1.4 million retail locations accept chip cards, Mastercard reported. That’s out of a total of about 14 million, or just 10 percent.