For the retail petroleum industry, the clock is ticking down to zero for being enabled for EMV at the pump. It’s been more than seven years of petroleum retailers preparing for EMV, spending countless millions of dollars on development, testing, and installation of EMV readers, payments servers, and front court controllers. And now they are within one year of the date (October 2020) when the fraud liability shift will take effect at those outlets still using magnetic stripe readers instead of EMV chip readers.
This date has major ramifications for everyone involved in retail gasoline sales, including the major petroleum brands, the POS system vendors, the pump manufacturers, and the payments acquirers. EMV at the pump has proven to be a vexing problem for the retail petroleum industry. Lack of available hardware and software, complex testing and certification challenges, a shortage of trained and licensed installers, and inadequate education about the risks of not properly planning for EMV have contributed to a potential Halloween fright fest next year.
Consumers are already feeling the impact. Criminal gangs are ramping up their activity to steal credit cards data using skimming devices at pumps so they can make as much money as they can before the swipe readers are replaced with more secure chip readers. Data shows that when a gas customer gets their card skimmed, they blame the gas retailer. They then start paying inside the store, or switch to cash, or take their business to the other nearby superstations. All of these choices are bad for business, and soon the local operator will be on the hook for bank chargebacks too.
The petroleum industry was given an extra three years from their original fraud liability shift date of 2017, which was already two years more than other retailers received. Yet with 120,000 retail stores in the U.S. and most of them (about two-thirds) single store operators and not chains, Linda Toth, director of standards for Conexxus, a C-store and petroleum industry standards organization, remarked in a recent C-store publication that 58% of petroleum retailers who have yet to upgrade believe they won’t make the liability shift deadline, and 25% of those said they have no idea when they’ll upgrade. While that’s a frightening statistic, members of the Secure Technology alliance and the U.S. Payments Forum are working hard to assist the petroleum industry to increase the percentage of EMV-enabled pumps by October 2020.