By: Bill Pittman, Senior Vice President, Petro Solutions –
Most people in this industry are aware that after several postponements, the deadline for the liability shift happened on April 17th, 2021. Station owners are now fully liable for any chargeback transactions made at outdoor payment terminals that do not support the new EMV chip card standard. Retail underwent a similar liability shift a few years ago. Even those who had a video and signature of the person purchasing still lost the chargeback every time they did not have an EMV capable terminal. The other issue in retail and Canadian stations is that the fraudsters identified non-compliant locations and targeted them. So even if you did not have chargebacks before, you might start getting them now.
But why the push to move to EMV chip cards? The rest of the world has been using EMV and contactless for years, as fraud was more prevalent in those locations. The U.S. was one of the last counties that did not support EMV chip cards. While not perfect, EMV chip cards are more secure than mag-stripe cards. The reason is that it is easy to get mag-stripe data with a skimmer and create their own cards with a credit card embosser. This equipment is cheap and readily available online at places like Amazon. While the mag-stripe data is easy to replicate, the chip is not. If you swipe a chip card, the payment terminal will recognize that it is an EMV chip card and ask you to insert versus swipe. So even if you get the mag-stripe data from a chip card, you will not easily be able to use the card without a chip.
If you upgraded your outdoor terminals to support EMV chip cards, you are in good shape. However, if you have not upgraded your terminals, you need to be concerned. First, some brands are fining stations that have not upgraded. So not only will you be responsible for chargeback but fines as well. More importantly, chargebacks can put you out of business. According to Linda Toth, Managing Director of Conexxus, it is anticipated that approximately $450 million worth of counterfeit fraud will occur at outdoor payment terminals this year. Any of that fraud that happens after April 17th on a non EMV compliant terminal will become the merchant’s responsibility.
Since the deadline was in April, stations are now starting to get chargeback notices. At a recent trade show, several station owners indicated they had gotten chargebacks for several hundred dollars. One station even mentioned that it had $8,000 in chargebacks; this is just the beginning, as it will get worse over time as the fraudsters target your station.
So, what are your options? Some stations have stopped taking cards at the pump and make their customers come inside to pay by card. I think this is a non-starter because most of us have become spoiled by pay at the pump. If I go to a station that does not support pay at the pump, I move on to the next station. Nobody wants to wait in a line inside the station to pay for gas.
The other option is to upgrade your pumps to support EMV chip cards. There are several ways to upgrade, such as buying new pumps, purchasing a retrofit kit from major manufacturers or purchasing a retrofit kit from a third party. You should investigate your options because factors such as how old your pumps are can help drive your decision.
Once you decide how you want to add the ability to accept EMV chip cards at your pump, you are not home free. One problem is because so many people waited until the last minute to upgrade, hoping for another postponement, the installers are backlogged. Sometimes for months depending on the size of the job – new pumps versus retrofit kit upgrades. New pumps can shut your station down for weeks, while retrofit kits can take less than an hour per fueling point while not shutting your station down. So it is easier for an installer to schedule a retrofit kit upgrade versus new pumps.
The other issue to be aware of is the global chip shortage. The global chip shortage is an ongoing crisis in which the demand for semiconductor chips is greater than the supply. This crisis impacts more than 169 industries and has led to major shortages and queues amongst consumers for video cards, video game consoles, cars, and other electrical devices like payment terminals and fuel dispensers. And this may not be a short-term issue; in fact, at a conference, Intel recently said the global chip shortage could take several years to correct itself.
If you have not upgraded your pumps to support EMV chip cards, my recommendation is to do it sooner rather than later because you will have to do it at some point. However, now you have to take new factors into consideration as you decide. First of all, you need to make sure you can get the equipment you need in a reasonable amount of time. Contact your supplier and make sure they have equipment on-hand. Then you need to contact your installer and make sure they are available when you need them –the sooner, the better. If you are working through one provider, they should be able to schedule everything for you.
Data indicates that so many stations have continued to hold off on upgrading. No matter what type of upgrade you choose, the most crucial factor is that you don’t continue to delay and put your station at risk.