The good news is when EMV is properly deployed, it can prevent fraud with a combination of chip technology and the ability to block almost all cloned credit and debit cards. Previously, gas stations were given a deadline to be fully compliant by October of last year, which put enormous pressure on the pump to install new terminals and often times, entirely new gas pumps. Luckily, Visa and Mastercard announced in December of 2016 that the deadline would be pushed to 2020 for gas stations to become fully compliant, giving them a few more years to get everything in order. Though this may seem like a relief, there is no reason for merchants who are not EMV compliant to be slacking.
There is a lot of time and energy that is associated with becoming EMV compliant. Two big things require time and energy:
- EMV integration takes significant resources that will require gas stations to completely re-wire every gas pump connection to support Ethernet connectivity.
- Gas stations will need to EMV certify every pump. Each upgraded pump will need to be tested and verified, as well as re-certified when the time comes. Experts estimate that gas stations could be looking at a cost of $30,000 just to upgrade their entire establishment.
As the 2020 deadline starts to creep into clear view, gas stations and their owners need to be working towards EMV compliance sooner rather than later. Fraudulent activity at the pumps is on the rise. In order to combat this type of activity while in the compliance process, gas station owners need to be vigilant to fraudulent behavior. Working towards becoming compliant early could save a lot of headache for gas stations and convenience stores.
Open to Threats
Gas station owners who have not implemented EMV are essentially extending an open invitation to fraudsters and thieves to target their businesses. Unfortunately, the majority of those who have not upgraded to EMV are gas stations and convenience stores with gas pumps. Visa and Mastercard have extended the deadline for gas pump conversion until 2020 due to the expense and logistics of upgrading gas pump card readers to EMV card readers.
The estimated fraud at gas stations totals around $400 million annually according to the National Association for Convenience and Fuel Retailing. The NACS echoes the warnings of others about the need to upgrade before criminals shift their focus to insecure gas pumps. In the interim, the NACS suggest that gas stations and fuel retailers should focus on increasing and updating all other security measures and developing a good relationship with local law enforcement.
Convenience Store News stated that there are more than 150,000 convenience stores in the U.S. About 124,000 sell motor fuel and are responsible for 80 percent of the gasoline sold in the country. They also note that 72 percent of fuel customers use some type of card to pay for their gas purchases. The magazine reported the time for these merchants to start thinking about upgrading to EMV to protect their customers' safety even though the 2020 deadline is still a few years away.
Fuel merchants will not be liable for any fraud until 2020 but CS News said delaying EMV longer than absolutely necessary could result in excessive fraud-to-sales ratios and chargebacks that could cause them to be hit with a variety of penalties over the next few years. Fuel sellers were recently made aware of incentives for upgrading ahead of time that will enable them to get up to date hardware and software, better access to technicians, improve their image and protect their customers.
Upgrade Now and Benefit
According to Linda Toth of Conexxus in a webinar sponsored by the US payments Forum and Conexxus, there are advantages to getting ready to upgrade now. The benefits include better access to state-of-the-art equipment and upgrade options, including contactless card readers and pump options such as video displays. Upgrading early also gives merchants access to technicians who are able to upgrade gas pumps, which can be a substantial undertaking.
Toth says waiting until the last minute can put them in a competition with competitors to have their upgrades completed by Oct. 1, 2020. As chip cards become the standard, consumers are starting to want to use them exclusively with merchants and vendors who can offer them the most secure transactions available.
About 800,000 individual pumps need upgrading, but NACS says there aren't enough technicians available to install the new card readers. According to the webinar, the entire process of installing chip readers at the pumps can take up to 16 weeks including upgrading both hardware and software at the outdoor pumps.
The fact is that EMV and other security measures are becoming more important today because point-of-sale data breaches and other concerns are growing more prevalent, according to the latest Security Report from Trustwave Global. POS data breaches are on the rise, with 31 percent of all incidents targeting businesses involving POS last year, up from just 22 percent in 2015. These types of incidents were, in fact, most common in North America, due in part to the slow EMV migration.
Chip cards are designed to prevent skimming as long as the merchant has the technology put in place to process these cards. As conversion to EMV takes a back seat for gas station owners, their businesses will continue to attract skimmers. Gas station owners must determine if the cost to avoid converting to EMV is worth the risk of fraud chargebacks.
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