ALEXANDRIA, Va.—Mastercard said yesterday that it will abandon magnetic stripes on its credit and debit cards beginning in 2024 in most markets, a move that will directly impact convenience and fuel retailers who haven’t yet upgraded their fuel pumps to accept chip card payments as part of the now-overdue EMV liability shift.
In a blog post, the credit card giant said that starting in 2027, U.S. banks will no longer be required to issue chip cards with magnetic stripes, and by 2029, no Mastercard credit and debit cards will have magnetic stripes. Mastercard said it is the first payments network to phase out magnetic stripe cards.
“Mastercard’s intention to issue only chip-enabled credit and debit cards with no magnetic stripes is a de facto mandate for merchants to implement EMV payments at the pump or be at a competitive disadvantage with outdoor payments,” said Linda Toth, Conexxus managing director. “That means retailers who don’t make the switch before Mastercard stops issuing magnetic stripe cards by 2029 will only be able to accept mobile payments at the pump or be forced to send fuel customers inside the c-store to process EMV payments.”
Convenience retailers are now fully liable for any fraudulent charges made at non-compliant outdoor payment terminals, and those who have not yet upgraded to outdoor EMV will be required to repay those charges to the credit card networks.
The deadline to shift liability from card issuers to retailers was originally scheduled for Oct. 1, 2017. However, given the challenges facing convenience retailers in compliancy, American Express, Discover, MasterCard and Visa extended the deadline to October 2020. When COVID-19 struck, many retailers had their efforts to become EMV-compliant disrupted. The card brands granted another extension, this time to April 16-17, 2021.
Although the EMV liability shift date has passed, retailers who have not converted to outdoor EMV and are met with fraud are likely to be dealing with chargebacks to cover the liability of fraudulent charges.
A Conexxus white paper “Resources and Guidance for EMV Implementation in a C-Store Environment” brings together educational information, frequently asked questions and links to resources for convenience retailers on EMV implementation.
Register to attend the 2021 NACS Show October 5-8, at McCormick Place in Chicago and take advantage of the education sessions, including The Payment Blueprint of the Future on October 7, which will explore the future of digital payments.