Have you heard gas stations within the U.S. will have to make the shift to become EMV compliant? Previously, gas stations were given a deadline to become compliant by October 2017, putting significant pressure at the pump to install not only new gas terminals, but in many cases new gas pumps. However, in December of 2016, Visa and MasterCard announced gas stations would now have until October 2020 to become fully EMV compliant – giving them three extra years to make the transition.
“While we remain committed to moving businesses to chip technology as quickly as possible, we are also constantly monitoring industry progress and attempting to proactively address marketplace realities,” Visa addressed on its website. “We believe we have reached a balanced conclusion for providing needed, additional time to merchants while continuing to push forward with the migration to chip.”
Becoming EMV Compliant Requires More Infrastructure than Just Upgrading Payment Systems
For many gas stations, this delay comes as a relief, as the majority did not have the time or finances to meet the previously expected deadline. Integrating EMV will take significant time and resources and will require gas stations to completely re-wire every gas pumps connection. Currently, gas pumps use a two-wire, standard twisted pair connection. In order to process chip cards, all retail fuel merchants will be required to upgrade their wiring equipment to support Ethernet connectivity.
"We knew that the AFD [automated fuel dispenser] segment would need more time to upgrade to chip because of the complicated infrastructure and specialized technology required for fuel pumps," Visa says. "Five years after announcing our liability shift, there are still issues with a sufficient supply of regulatory-compliant EMV hardware and software to enable most upgrades by 2017."
EMV Compliance Requires Each Payment Terminal to be EMV Certified
Another predicament gas stations will be faced with is the EMV certification of each gas pump. Each upgraded pump will have to be tested to verify it is working properly as well as re-certified. This entire process will take a significant amount of time and cause gas stations to have several pumps out of service until they are upgraded, as well as be a costly affair. Experts foresee upgrading all gas pumps at a single store could cost up to $30,000 and upgrading all pumps nationwide could cost around $4 billion.
EMV Compliance as a Way to Prevent Fraud and Crime
Although gas stations have an extension to upgrade their pumps, experts are still pushing gas station owners to begin the process sooner, rather than later. With instances of fraud continuing to increase for non-compliant merchants, gas stations should look into upgrading their equipment as soon as possible despite the deadline. On an annual basis, gas stations experience approximately $400 million due to counterfeit fraud.
To help combat fraud, both gas station owners and consumers should be on the lookout for fraudulent practices at the pumps, such as skimming devices. Gas station pumps will now become a target for fraudsters to commit crime, primarily due to the fact that many retail merchants are , versus their gas station counterparts. The EMV compliance at retailers has made it difficult for fraudsters to commit crime at card-present stores, now pushing them to places like gas stations, where EMV compliance is less prominent.
Additionally, when it comes to credit card fraud, EMV compliance protects the merchant in a myriad of ways. In most cases, EMV card fraud liability falls on the card issuer if the merchant is EMV compliant, whereas if the merchant is not EMV compliant, the liability falls on the merchant.
As EMV continues to expand within the U.S., it is imperative for gas stations to begin the process of becoming compliant early to offset the chances of fraud hitting their business. Although the process of upgrading pumps will be costly and time consuming, the payoff of becoming compliant will be beneficial in the long run to keep both their business as well as consumers safe from potential threats.
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