NORTH LITTLE ROCK, Ark.—Starting in October, fuel pumps must be equipped to handle chip card transactions or retailers risk liability for any counterfeit fraud that might occur at that station, Bloomberg/Detroit News reports.
Gas stations had asked that implementation be delayed to provide more time to install chip readers, but Mastercard and Visa denied the request. Many retailers started the process in 2015, with fuel retailers given five additional years because of the more than $3.9 billion price tag the industry faced to complete the upgrade.
A recent Conexxus survey found that nearly 70% of industry respondents did not have EMV-compliant fuel pumps. Those who do not upgrade could incur costs of up to $201,000 per location over the next seven years, according to Conexxus, which estimates that the fuel retailing industry could experience $451 million in card fraud this year.
“There’s going to be quite a surprise come October,” said Laura Townsend, senior vice president of the Merchant Advisory Group. “Folks that have been trying to transition to EMV will be unable to because of things outside their control. But they will bear a significant increase in losses either come October or shortly thereafter because we know fraudsters will find the weakest link.”
The Conexxus survey found that more than half of the respondents said a lack of software held them back from being fully compliant, while 15% said they needed hardware to complete the upgrade. “The payment standard-setting process needs to be more open,” Anna Ready Blom, director of government relations for NACS, told the Detroit News. “Retailers and technology companies should have been part of the planning and decision-making on chip cards from the start.”
The card companies have been unwilling to extend the deadline for gas stations. Visa said in a statement, “We believe extending chip technology to fuel pumps is an important step to take to protect businesses and consumers who want to pay securely as well as conveniently.”
The December NACS Magazine cover story, “Ready or Not: Ignoring the Deadline for EMV at the Pump Could Be Costlier Than Upgrading,” offers an in-depth look at the EMV readiness issue. Subscribers, can click here to read the full story.