EMV Chip Cards Are Slow To Reach Gas Pumps


Credit and debit cards with EMV chips have been around for five years now, except at gas stations. That’s because it is a lot harder to change card readers in gas pumps — where it may require breaking and repouring concrete — than it is to change out the card reader which sits on a countertop in a store.

Changing the gas pumps is expensive and requires trained technicians. Credit card companies imposed a deadline on merchants by imposing a penalty — the card companies would not be responsible for losses after 2015 if the merchants hadn’t installed EMV-capable readers. Visa reported an 80 percent drop in counterfeit fraud after EMV was implemented.

Gas stations got more time to comply. On October 1, 2020 financial responsibility for the counterfeit card charges at gas pumps will shift responsibility from consumer’s issuing bank to the merchant’s acquiring bank — if your local convenience station gets hit with a fraudulent transaction by a buyer using a mag stripe because his gas pump doesn’t read EMV chips — it is his loss, not the credit card company’s. In a 2017 analysis Visa noted that fraud rates at fuel pumps were relatively low—approximately 1.3% of total U.S. payment fraud. A number of readily available fraud prevention tools, such as Visa Transaction Advisor (VTA), have been successful in driving fraud lower at fuel dispensers, the company added.

Now the question is whether service stations will get an additional extension past the current October deadline, which is already a three-year delay from the original date, said Dan Rasmussen, senior vice president at Hughes Enterprise which provides the networking infrastructure that gas stations and convenience stores use to process cards.

Banks would like to impose the deadline, he said but they don’t want to look like harming small businesses in the face of COVAD-19. Operators of gas stations, which are often combined with convenience stores, face pent-up demand, a shortage of technicians and some challenges with equipment inventory, said Rasmussen. Changing over pumps for EMV takes 10 to 12 weeks, he said. Very few stations are owned by the major oil companies, but the ones that are branded generally have to meet extensive specs.

So far the card companies show no signs of budging.

Convenience Store News reported in January that the Merchant Advisory Group (MAG) requested another two-year delay.

“However, Visa and Mastercard formally stated in writing that they remain committed to the October 2020 liability shift activation date, according to Laura Townsend, senior vice president of MAG.”

Visa said it is monitoring the situation but pointed out that this plan for a liability shift was announced in 2011; Mastercard did not respond to a request for comment.

Brian Lackie, owner of a Mobil gas station and convenience store in Sturgeon Bay, Wis., decided to replace his pumps two years ago. They dated back to 1999 and were an occasional maintenance headache. A general contractor, Lackie did the concrete work himself, but even so replacing three pumps came to about $140,000 — Mobil picked up about a third of the cost, he said.

Fraud didn’t play a role in his decision — he’s not especially concerned about it. Most gas charges are relatively small, $50 to $60, and the biggest fraud he has dealt with was one care giver using a card without permission, such is the life of crime in small town Wisconsin. But both the store and the pumps now are fully EMV compliant.

The significant capital investment required to upgrade aging automatic fuel dispensers (AFDs) has forced the industry to pick and choose whom to help. Operators of high volume, healthy businesses are being offered attractive financing packages and, in some cases, complete subsidization in exchange for long term commitments, Tim Tang, director enterprise solutions at Hughes, wrote in a blog. The brands are pushing marketers to finish their EMV transition before the deadline when the liability for fraud shifts from the card companies to the sellers. The industry is seeing the start of an ordering rush as stations realize the deadline is not far away, he added.

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