Payment technology may not be a topic that would draw a small-business crowd — except when the speaker is Square CEO (and now interim Twitter CEO) Jack Dorsey.
Dorsey, co-founder of one of the world's leading payment technology companies, joined U.S. SBA Administrator Maria Contreras-Sweet in a free public event Thursday morning held at FIU’s Urban Studios in Miami Beach and sponsored by Rokk3r Labs. The objective was to get out the word about major changes in payment security coming Oct. 1 and how small businesses can prepare.
“Sixty-eight percent of small business have been hacked. They have been victims of cyber-security fraud,” said Contreras-Sweet. “Effective Oct. 1, the credit card companies say you need the chip reader because they are changing the security. We want to get the word out.”
Dorsey explained why magnetic stripe cards are relatively easy to counterfeit and what is involved in making the switch to chip technology.
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The bottom line, he told small businesses: Now, if you run a fraudulent card, banks absorb the costs. Starting in October, if someone pays with a fraudulent chip card and you’re not set up with the new authenticating payment devices, after Oct. 1, “you will be on the hook for fraudulent transactions. The banks won't have your back.”
Both Square and competitors offer devices that qualify. Dorsey, who grew up in St. Louis, Missouri, co-founded Square with Jim McKelvey, now a Miami resident and founder of the LaunchCode apprenticeship program. Dorsey also shared some stories about growing up with entrepreneurship; his father started a pizza restaurant and his mother later ran a coffee store.
What he's learned: “Entrepreneurs are not necessarily born with these skills, they have a do-whatever-it-takes attitude to learn what they need to get to the next step. And then there is a new challenge. I never had dreams of being a CEO; I had dreams of getting the world communicating in a very free and empowering way.”
As for founding Square in 2009 in San Francisco, Dorsey said he hated the cumbersome credit card system. Entrepreneurs can build businesses by asking why something works as it does, and then explore better solutions, he said. “Our purpose at Square is to make commerce easy.”
Contreras-Sweet, a former banker, talked about the new LINC program on sba.gov that eliminates the need to fill out dozens of loan applications. When an applicant answers up to 20 questions online, they are shared with banks that respond within 48 hours with terms and offers.
Sharing their stories about successes and obstacles were four local small businesses: Panther Coffee, LuLu's Ice Cream, Sugar Yummy Mama bakery and the Wynwood Warehouse Project cafe, event and gallery space. All were passions, said the owners, that became their livelihood.
Follow Nancy Dahlberg on Twitter @ndahlberg.