Here’s what I’m used to doing: I walk into a typical coffee shop. I order coffee. I hand over my credit card. The person behind the counter swipes it.

I decline the receipt. I’m out the door. It’s fast and simple. You too? Well, that’s all about to change for both of us. And for your clients, particular if they’re retailers. And the person who runs the coffee shop? That’s going to change for her too. And if she doesn’t change, she could be faced with huge costs.

Starting soon (if not already), you and I will be receiving new credit cards with EMV chips embedded in them. And come this October, those EMV chips will make buying a coffee (or groceries, or a sandwich or anything else that’s using a credit card) a completely different experience — for both the buyer and the seller. It has to do with fraud. Today, if credit card fraud occurs at a merchant, the credit card company usually covers it. But that’s going to change this year.

On October 1, if a merchant doesn’t accept a credit card with an EMV chip, and the transaction is fraudulent, then the merchant will be liable for the costs. So merchants need to act … now. They need to upgrade their point of sale systems. They need to get educated. They need to learn about EMV.

EMV cards with chips are nothing new — they’ve been used in Europe and other parts of the world for years. It’s an industry standard that’s used to fight fraud. It takes a different kind of reader to process the card (you don’t swipe anymore, you insert). The chip has encrypted data about the customer and the transaction that makes it much more secure because it’s very difficult for someone to make duplicate copies of a card and counterfeit them (80 percent of credit card fraud is caused by counterfeiting). At first customers will be asked to sign — that’s called “chip and signature.” I predict that within a few years we’ll all be asked to enter a PIN.

EMV works. For example, lost and stolen card fraud fell by 58 percent during the five years after U.K. retailers adopted the technology. In Canada, a national rollout in 2008 also had a dramatic impact on fraud. Similar data has been reported throughout Europe, Asia and South America. The U.S. is finally waking up to this reality and the credit card industry is taking the lead in this transition. For your small merchant or business owner clients, the transition could be much, much more painful … particularly if they don’t comply. They could be facing huge liabilities after October 1, in two huge ways.

As mentioned above, if they’re not using an EMV-compliant system, they may be responsible for the costs incurred if a transaction is fraudulent, instead of the credit card company picking up the bill. I know — it’s another cost for them. But in the long run, reducing fraud will reduce everyone’s costs.

And second, they’ll lose customers if they’re not using an EMV-compliant system. Why? Because why would I want to shop at their store and subject myself to the potential headaches and hardships of a fraudulent transaction when I can go to their competitor and shop knowing that my private information is much, much more secure? This is not just a cost of doing business. This is an investment in customer service.

No, the credit card companies are not the bad guys. And some of them are chipping in to make the transition a little easier. For example, American Express announced a program recently where eligible merchants that have upgraded to an EMV terminal can request through April 30 a one-time $100 reimbursement. (Note: American Express is a client of my company, but I have not been compensated to write this piece.) The company will also deliver educational resources about EMV to small merchants across the U.S. through e-mail, a telephone hot­line, and a Web site, and a team of ambassadors will visit a few major cities to meet face to face with small merchants so that they can help spread the word about EMV and its benefits.

According to their press release, the company did a survey and found that 67 percent of small merchants indicated that protection against and prevention of payment-card fraud was very important, yet more than a third of them said that they have not decided whether they will upgrade their payment terminals (or do not plan to) — with most citing costs as the main reason.

“Unfortunately, many small merchants do not know about EMV or what they need to do to take advantage of it,” said Anre Williams, president of global merchant services at American Express. “By providing financial and educational assistance, we hope small merchants more quickly adopt EMV so they can ensure their customers feel safe when shopping at their stores.”

For consumers, it’s time to say goodbye to the swipe. And for those businesses that plan to stay competitive, it’s time to face up to a whole new way to counter fraud. Or face huge liabilities.

Besides Accounting Today, Gene Marks writes for The New York Times, Forbes and Inc.com. A version of this column previously appeared on Forbes.com.

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