As Deadline Looms, Merchants And Consumers Not Ready For New Chip-Enhanced Credit Cards

NEW YORK (CBSNewYork) -- Retailers have less than 24 hours to upgrade their systems for the new chip-enhanced credit and debit cards, but many of them are not ready.

Only about a quarter of businesses nationwide have the new machines needed to meet Thursday's deadline and many credit card users don't even have the new cards in their wallets.

As CBS2's Dave Carlin reported, for shoppers, it's a small learning curve, but for merchants it's a big deadline and a big change.

"It just came in August with a chip on it," said Washington Heights resident Susan Wasstrom.

With Wasstrom's new card there's no swiping, just dipping into new point of sale terminals where the card stays until the transaction's complete.

But more than half of Americans don't have the new cards, Carlin reported.

Luckily for customers, the new machines take both kinds of cards, but merchants are under pressure.

Thursday is the deadline for installation, which big retailers like Target and Walmart have completed. But many smaller stores are not ready.

"We have not gotten anything yet and it's Oct. 1 tomorrow," said store owner John Soroka.

Soroka, owner of Delphinium Gifts in Midtown, could now be held liable for fraudulent purchases, paying out of pocket what banks used to cover.

Say someone buys a $60 candle with a counterfeit card based on the new chip design. If the store doesn't have a new system and terminal, the merchant is forced to take the $60 loss, Carlin reported.

"If we don't get this, it will become more our responsibility," said Soroka.

"Overall, there's just a lot of confusion," said Matt Schultz, with Creditcards.com.

Schultz said new terminals cost anywhere from a few hundred dollars to more than $1,000 each. And many businesses won't convert to the new system until next year.

"Some merchants just aren't going to bother with it because they don't necessarily think that it's worth their money, even with the risk of being liable for credit card fraud," Schultz said.

Soroka said before the holiday shopping season, he will have the new "dip the chip" technology.

"I think it is a good thing in the long run. I do think having extra protection for everyone is the way to go," he said.

Eventually, everyone will need the new chip-enhanced cards. And if you don't have yours yet, call your bank and ask when it's coming or apply for a new one.