Heard about Hollywood’s upcoming movie? The Return of the EMV Monster. If you didn’t like the original, you’re not going to like the sequel. Remember this date, October 2017, which is when every US fuel retailer must accept chip cards or else assume fraud liability, as described in the following article.
By October 2017, every fuel retailer in the United States “must either accept the new chip-card technology called EMV—named after its backers Europay, MasterCard and Visa—or pay potentially half a billion dollars in collective ‘chargebacks’ for any such fraud,” writes the news source.
Like most retailers, NACS Executive Committee member Jared Scheeler, managing director of the Hub Convenience Stores in Dickinson, North Dakota, is facing a costly decision this year that has no ROI: upgrade or replace every fuel dispenser.
About one third of the 750,000 fuel dispensers in the U.S. are too old and would need to be replaced to accept EMV chip cards, noted Gray Taylor, executive director of Conexxus. The average cost of replacing a fuel dispenser unit is $17,000. In all, the convenience and fuel retailing industry will be on the hook for more than $7 billion to replace or upgrade their POS equipment to accept EMV cards—both inside the store and at the pump. According to Taylor, about one-quarter of the industry cannot afford to implement outdoor EMV, especially when indoor EMV is still ongoing.So far, outdoor EMV implementation is lagging. “We are close to zero,” Allen Friedman, vice president of payment solutions at Ingenico Group SA, told Bloomberg. “I don’t know any major U.S. petroleum companies or gas-station providers that have even started implementation.”
Even with these concerns from retailers and service providers, and the mounting software certification issues, MasterCard has no plans to change its EMV-migration timeline or change the October 2017 deadline. Chiro Aikat, a senior vice president at MasterCard, told Bloomberg that the company will continue to work with gas stations to implement EMV.
For fleet cards, WEX Inc. told Bloomberg that it won’t have a chip-enabled card available for use until early 2018, according to Phil Baker, WEX’s director of mobile and payments. WEX is voluntarily complying with the EMV switchover, even though fleet cards don’t use mainstream payments networks like Visa and MasterCard.
The gas pump EMV conversation has a higher degree of difficulty than the indoor stores’ POS scenario. It’s not a matter of just swapping out a terminal and updating the software, plus certification. There’s a lot more hardware and moving parts involved, not to mention the less than enthusiastic response from station operations, especially due to the costs involved. Expect continued pushback from the fuel retailers and more horror stories that would make a good plot for a movie thriller.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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