Originally posted in the Summer 2020 PMAA Journal –
The EMV liability mandate for pay at the pump has been extended six months to April 2021. This is the third extension and more than likely the last. So, now that there is a little breathing room with the deadline extension for upgrading to support EMV at the pump, what’s next?
Most of us have felt the impacts of COVID-19, and times have been tough for many. We should expect a new normal. Many changes are here to stay for a while — some perhaps indefinitely.
Upgrading to support EMV was already a concern for stations, evidenced by the Conexxus survey data last year and the requests for multiple deadline extensions. Respondents cited lack of available software options and price as top concerns in the survey. Most options they are aware of involve a complete pump replacement, resulting in expenses in excess of $100,000 per site, not to mention the operational headaches of pulling up concrete and completely disrupting the daily operations and revenue.
However, the costs of noncompliance at the pump have resulted in more than $500 million in chargebacks in the last several quarters, and as a result, brand reputation becomes ruined when there is fraud found at the pump. The consequences could mean putting a station out of business.
The good news is that there are now more options that are cost-effective, and stations have time to evaluate those options and make an informed decision. However, some of the industry challenges include lack of available installers, so now is the time for stations to act. Waiting could mean spending more on an upgrade, and even worse, your installation could be pushed past the deadline.
In addition to a station ensuring it is not held liable for fraud, an upgrade could also mean promoting fewer touch points if the solution has contactless capabilities — all important factors during this new normal. With contactless EMV, there is no need to insert a card or enter a ZIP code or signature. Eliminating touch points is a positive benefit that a station can promote to customers.
Keeping in mind that there are an estimated 2 million fueling points in the U.S., that it is estimated only 10 percent are EMV compliant and that a large number of stations can’t afford the high costs of a complete replacement — the best option for stations is to upgrade by using an affordable retrofit solution. The key word is “affordable” because there are a number of vendors that may promote retrofit solutions, but the price is still high, and the solution is lacking in options.
A semi-integrated retrofit solution can eliminate touch points, simplify installations, add contactless to support social distancing guidelines and serve as a cost-effective solution at a time when stations are concerned about their bottom line.
There are a few important points to consider when evaluating a retrofit upgrade, which is the clear choice for those who can’t commit to a full pump replacement. Does the vendor use a semi-integrated solution at the pump, or does it require a fully integrated solution? Does it allow for easier scalability? What is the installation process — can you upgrade one pump at a time, or do you need to shut the station down? How about security — is it tamper resistant and is it P2PE, i.e., card data encrypted, at the point of entry? With a retrofit solution that enables EMV, you can use your existing pumps and should be able to support EMV at a much lower cost of a new pump.
The Importance of Semi-Integration
Traditional industry certifications for EMV take about six-plus months to complete, which is why having multiple certification requirements is not ideal. With a semi-integrated solution, there is a single certification because the device goes directly to the payment processor. For a fully integrated solution, which most of the industry supports, any time a component in the payment flow changes, such as card reader, forecourt controller or payment software changes, the solution needs to be recertified — a time-consuming process.
Full integration includes the payment application as a part of the core POS solution. It handles every aspect of the transaction, from reading the barcode scan or chip on a card and pushing the credit card data, to the processor for managing inventory. All card data is handled by the POS and therefore in direct PCI scope.
With semi-integration, the terminal or device used to capture customer card data is connected directly to the payment processor, so no certification is required as depicted on page 17.
The challenge for stations is to ensure the attended POS system works with their unattended pay-at-the-pump solution and they both work with the forecourt controller. This is further complicated with EMV and the primary difference between full integration and semi-integration.
Thinking About the Future
If you can get the complete solution from one vendor, they should work together, and you only have one place to go for support. Additionally, with technology that supports the future, a station could benefit from additional features, such as ordering at the pump and a terminal that accepts contactless payment transactions. This, however, does not detract from the costs to upgrade and remain compliant as the industry evolves.
With a semi-integrated solution, updates can take place systematically and not force a site to close while underway. This allows the business to continue operating and the customer relationship to continue flourishing, all while keeping the solution both compliant and safe from the bad guys. Furthermore, the solution removes the dependency on POS for changes and recertification by decoupling the payment from the transaction.
Your pay-at-the-pump terminal should support existing payment methods, such as PIN entry for debit, and new payment methods, such as contactless through Apple Pay, Samsung Pay and other digital wallets and loyalty programs.
Ease of Installation and Scalability
With today’s advice by the CDC and WHO to practice social distancing to reduce the amount of human contact, a cloud-based, simplified solution allows for much of the process to be completed remotely, with only one or two people needed for an on-site install. Installation takes one hour or less per dispenser, minimizing downtime.
There are many benefits for stations to select a semi-integrated retrofit as their EMV solution. While upgrading may seem like a nightmare today, many will come out ahead — if they take the action today to understand what is involved, evaluate their business challenges and choose a vendor for providing the solution to meet their needs.