Small businesses sue credit card companies over chip readers

SAN FRANCISCO (CNN) – A lawsuit is moving forward over the new credit card chip readers rolled out at many stores across the nation.

A judge is allowing small businesses to sue major credit card companies for forcing them to use the devices. Businesses say the machines are expensive and don’t fully protect from fraud.

They are also accusing credit card companies of penalizing them if they don’t upgrade to the new chip readers.

The lawsuit was brought forth by grocery stores in California, Florida, and New York. They sued American Express, Discover, MasterCard, and Visa earlier this year.

Credit card companies, banks and major retailers came up with the terms for businesses to use the chip readers. MasterCard said the it has a strong case to support the chip readers and expects to win the case in court.

The lawsuit, at this point, is not a class action. But, if it is granted class action status, eight million small businesses could make that lawsuit a $6 billion case. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others and keep the conversation on topic and civil. If you see an inappropriate comment, please flag it for our moderators to review.

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