SAN FRANCISCO – As people resolve to change habits with the New Year, one habit that they won’t have a choice about changing is “swipe” versus “dip” when paying by card at retailers across the country, as the United States embraces EMV or “chip and PIN” cards.

However, as a recent article in USA Today points out, the PIN part of "chip and PIN" is something of a misnomer. In the rest of the world, when people buy with a credit card, they dip their card in the reader and then input a personal identification number, similar to an ATM.

With the new, more fraud-resistant cards in widespread use, data breaches like those that hit Target and Home Depot should become less common, because merchants won't be storing anything useful to thieves in their systems. USA Today cites a report by the Federal Reserve Bank of Kansas City, Mo., stating that the chip cards could reduce credit card fraud by 40% in the United States.

But getting to that happy day requires money, work and expense on merchants' part, as the October 1 liability shift approaches. At that time, merchants who haven't switched to EMV-compliant card readers inside the store will be liable for fraud if there's a problem.

"It's not going to be without cost," Todd McCracken, president and CEO of the National Small Business Association (NSBA), told USA Today. "Depending on the size of the establishment, replacing all their card machines is going to cost a pretty penny."

Costs will vary depending on how big a merchant is. For smaller mom-and-pop operations, new card readers may be available for less than $100. And credit card companies are working with merchants to help upgrade: For example, American Express will begin offering $100 in reimbursement to small merchants that switch to the chip card readers in February.

The article emphasizes that the biggest question for merchant groups like NSBA, is whether the savings on fraudulent charges that the credit card companies will see end up being translated into lower rates for merchants.

"They've been telling us for years that the reason small businesses pay such high fees for taking credit cards is fraud," NSBA’s McCracken said. If the liability is moving to the merchant, and if the new chip cards are so much more security in the first place, the credit card fees small merchants pay should go down.

Read more on chip and PIN in NACS Magazine.