ALEXANDRIA, Va.—Only 13% of fuel retailers, fuel distributors/wholesalers and major oil firms surveyed by Conexxus indicated that they have fully deployed EMV-compliant payment systems at their fuel pumps, and only 42% indicated they will be ready by the October 1, 2020, liability shift.
Currently, gas stations are not liable for any counterfeit fraud that occurs at the pump. However, the nationwide shift to Europay, Mastercard, and Visa (EMV)—a chip-based payment system developed to make credit and debit card transactions more secure—will shift liability to gas station owners for fraudulent transactions after October 1, 2020.
Fuel retailers have until then to install functional EMV® chip-card readers at gas pumps, along with the necessary POS or EPS software to interface to them. Making fuel dispensers EMV-compliant protects the merchant from accepting fraudulent credit cards, and additional features, such as encryption, may be added to help make the payment system even more secure. It also will reduce the chance of charge-backs from credit card companies, which have vowed to push any fraudulent expenses back to retailers whose pumps aren’t upgraded by the 2020 deadline.
Conexxus fielded an electronic survey from June 10 to July 8, 2019, to determine the level of preparedness of the U.S. convenience and retail fueling industry for the EMV liability shift for both automated fueling dispensers (AFDs) set to take place October 1, 2020, and all other transactions which went into effect in October 2015.
Conexxus reached out to more than 1,600 individuals at 1,100 organizations representing individual sites, retail chains, major oil firms and fuel distributors and wholesalers. Utilizing convenience sampling methods, Conexxus received 88 unique completed surveys, including 79 respondents who own or operate a total of 26,284 retail sites.
For respondents who own and operate fuel retailing sites, 86% surveyed report that they have fully deployed EMV-compliant units for payments inside their stores. Among the retailers that aren’t fully EMV compliant inside the store, nearly 87% already have the hardware installed, but nearly 44% are waiting on software to make the switch.
At the fuel island, however, 70% of those surveyed indicated they had zero sites deployed. Of these, more than three-quarters surveyed indicated they intend to implement EMV at the pump. About a quarter of sites have functional hardware installed, with the remainder needing new hardware or upgrades. Among respondents who indicated they haven’t decided to make the switch or had decided against it, the cost of upgrading and the risk not justifying the expense were the top two reasons cited.
“Convenience retailers have a little more than a year left to meet the EMV liability shift deadline at their dispensers, and it’s clear that for many it will be a scramble,” said Linda Toth, director of standards, Conexxus. “There are several stumbling blocks to meet the date, including lack of available and certified software. And while many retailers have made the decision to upgrade, there remain retailers who think that this upcoming liability will not affect their businesses. The fact is that many site owners do not understand their actual risk, and come October 1, 2020 and beyond, they will be in for a rude awakening that will hit their bottom line.”
Lack of available software was cited by just over half of the respondents as the top challenge to implementing EMV at the pump. Still, 42% of those surveyed said they already are or will be 100% deployed by the October 2020 deadline.
Typically, major oils/fuel distributors support multiple vendors for the hardware and software their branded sites need to comply with the EMV rules, both inside their stores and at their fuel pumps. The survey found that for indoor EMV requiring card contact (not tap and go payments), nearly 60% of respondents indicated they had certified solutions ready for deployment from all of their vendors. For outdoor card-contact EMV, no respondents had certified solutions ready to roll out from all of their vendors. More than 28% are waiting on software from one or more vendors, and nearly 15% are waiting on hardware.
The United States has more than 153,000 retail fueling and convenience stores, with roughly 80% of the stores selling fuel, according to NACS State of Industry Report of 2018 Data.
For more on EMV compliance in the fuel retailing industry, visit conexxus.org.