Why businesses are not using credit card chip readers

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Stores Still Aren't Ready for Chip-and-Pin Credit Cards

Major credit card companies urged retailers to make the switch to credit cards that used chips instead of magnetic strips to complete transactions in October 2015, 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, and 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.

If you want more credit, check out MoneyTips' list of credit card offers.

Originally posted at Moneytips.com.

More from Moneytips.com:
Retailers Continue To Put Off Updating To Chip Readers
Criminals Target Stores Without Chip Readers
Credit Card Fees Consumers May Not Know About

RELATED: A look at smart chip credit cards

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Why businesses are not using credit card chip readers
BERLIN, GERMANY - DECEMBER 10: Memory chip on a credit card, master card on December 10, 2014 in Berlin, Germany. (Photo by Thomas Trutschel/Photothek via Getty Images)
A customer enters their pin number as they make a chip and pin payment via a Verifone Systems Inc. credit card payment device at a restaurant in London, U.K., on Friday, May 22, 2015. Credit and debit cards that can be used by tapping the reader are gaining users, and mobile apps are set to further boost the popularity of contactless paying. Photographer: Simon Dawson/Bloomberg via Getty Images
An employee demonstrates the use of an iZettle chip and pin reader mobile payment device at the iZettle AB headquarters in Stockholm, Sweden, on Friday, Aug. 28, 2015. Swedish payments startup iZettle AB, a rival to Twitter Inc.founder Jack Dorsey's Square Inc., raised 60 million euros ($67 million) to expand in Europe and fund a plan to offer merchants cash advances on future card sales. Photographer: Johan Jeppsson/Bloomberg via Getty Images
BERLIN, GERMANY - DECEMBER 10: Memory chip on an EC card on December 10, 2014 in Berlin, Germany. (Photo by Thomas Trutschel/Photothek via Getty Images)
Service Manager Morgan Mallory holds a Rail table side credit card processing device at Tableau, a Dickie Brennan & Co. restaurant, in New Orleans, Monday, June 15, 2015. Dickie Brennan & Co., which operates four New Orleans restaurants, expects to pay more than $25,000 to replace card readers and software once chip cards are phased in and magnetic stripe cards, which are easier for thieves to copy, are phased out. (AP Photo/Gerald Herbert)
Patron Jake Kratz, of Philadelphia, pays his tab with the Rail table side credit card processing device at Tableau, a Dickie Brennan & Co. restaurant, in New Orleans, Monday, June 15, 2015. Dickie Brennan & Co., which operates four New Orleans restaurants, expects to pay more than $25,000 to replace card readers and software once chip cards are phased in and magnetic stripe cards, which are easier for thieves to copy, are phased out. (AP Photo/Gerald Herbert)
FILE - In this Nov. 18, 2009, file photo, a MasterCard credit card with a computer chip is posed for a photo in Gelsenkirchen, Germany. By autumn 2015, millions of Americans will switch to credit cards with a computer chip instead of a magnetic strip _ 50-year-old technology that lingers on the back of U.S. cards and is easily copied by thieves, leaving people vulnerable to fraud. (AP Photo/Martin Meissner, File)
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