March 21, 2016
New report finds only 39 percent of SMEs in USA have adopted EMV chip card technology
ATLANTA--Nearly six months into the EMV chip card mandate, the PYMNTS.com SMB Technology Adoption Index, powered by Sage, for first quarter of 2016 finds that only 39 percent of small and medium businesses (SMBs) have implemented the required technology to accept Europay, Mastercard and Visa (EMV).
The SMB Technology Adoption Index is a quarterly report released jointly by Sage, the market leader for integrated accounting, payroll and payment systems, and PYMNTS.com, the premier source of news and commentary on innovation in payments. The Index looks at business and technology trends impacting U.S. small and medium businesses (SMBs).
Conducted in January 2016, this quarter's Index finds that almost half (49 percent) of businesses that said they do not yet accept EMV chip cards also have no plans to accept them in the future. Of SMBs saying they have no plans to accept EMV, the majority were business-to-business (B2B) companies that either see no benefit to initiating the process of EMV integration or do not have enough volume to make implementation worthwhile.
"Owners of small and medium businesses face incredible challenges as they try to grow their businesses, so their payment systems are often the last thing on their minds," said Paul Bridgewater, CEO of Sage Payment Solutions, the payments division for Sage North America. "I think what you're really seeing with this research is a gap in understanding just what the EMV mandate means for businesses. It's on industry leaders to make sure small businesses can access all of the tools they need to get educated and stay current on EMV in a way that works for them."
Other key takeaways from SMB Technology Adoption Index for first quarter of 2016 include:
>An overwhelming majority of SMBs say they implemented EMV technology for one of two reasons -- either because it is required by a processor or because of safety concerns.
>While SMBs say their biggest concern is getting paid on time, only 19 percent of them have a completely or very automated invoice process.
>Mobile pay adoption remains low, as Apple Pay and/or Android Pay are accepted by only 1 percent of SMBs.
One problem this quarter's Index seems to bring to light is a lack of awareness by small businesses of how much ground they have to make up when it comes to adopting technology. In fact, 56 percent of customer-facing businesses (B2C) rate themselves between 7 and 10 (on a scale of 10) when it comes to how integrated their company is in terms of using technology to manage their cash flow.
"Small and medium businesses make up nearly half of the private sector payroll in the U.S., so their influence on the economy is significant," said Karen Webster, CEO of PYMNTS.com. "What we're seeing in the SMB Technology Adoption Index, though, is that far too many of these types of businesses are not taking advantage of all of the advancements in technology that are available to them. As we continue to better our understanding of how small businesses are evolving, we hope to watch these numbers improve as time goes on."
"It's our hope that small and medium businesses will use the Index as an educational tool to improve the way they manage all aspects of their cash flow," added Bridgewater. "Companies that lag behind when it comes to utilizing the latest and greatest in payment solutions can slow their growth, lack efficiencies, and even provide a decreased customer experience."
The research was conducted through an online survey among 700 small and medium business professionals during January 2016. After removing incomplete responses, 568 were included in the analysis. Confidence level is 91.8 to 95.9 percent.