CHICAGO - The majority of payment terminals at U.S. merchants will not be ready to accept cards with embedded microchips aimed at reducing fraud by Oct. 1, missing a deadline set by banks and credit card companies, according to the National Retail Federation. About 40 percent of payment card terminals at U.S. merchants, a category that includes retailers, taxi drivers and doctors have been upgraded ahead of Thursday’s deadline, according to the retail industry lobby. Merchants are spending $30 billion to $35 billion to upgrade their terminals, the lobby said. Mallory Duncan, general counsel of the group, said a shortage of people who are needed to certify payment terminals was a big reason for the rest of the merchants not immediately meeting the deadline. The urgency to meet the new standards, known as EMV, which stands for Europay, MasterCard and Visa, for merchants stems from a broader battle over who bears liability for credit card breaches: retailers or the financial firms that extend the credit. Currently, card issuers are generally liable for fraudulent charges. After the October deadline, if a retailer is not using a terminal that can read the new cards and a security breach occurs involving a chip card, the retailer will be liable, though consumers will still deal with their banks in the event of a fraudulent charge. If the retailer is ready to accept the new cards, the card issuer will be liable. Banks and payment card networks who have pushed retailers to comply with the deadline have also fallen short in rolling out chip-enabled cards to customers. On Monday, the Smart Card Alliance, said over 200 million chip-enabled payment cards have been issued. The total number of payment cards in the U.S. stands at approximately 1.2 billion. Also, despite a hefty price tag for retailers investing in these new payment terminals, the switch will only address a narrow range of security issues, the group said. U.S. banks and card companies will also not issue personal identification numbers (PINs) with the new credit cards, an additional security measure that would render stolen or lost cards virtually useless. Instead they will stick with the present system of requiring signatures. Analysts predict that credit card fraud at brick-and-mortar retailers will fall after the introduction of chip-enabled cards, but that online fraud will rise, as has happened in other countries using the technology.