Credit cards are now being issued with an EMV chip, and business owners across the country have updated their point-of-sale systems to accommodate chip cards. The first point-of-sale requirements took effect in 2015, but another deadline is on the horizon—the EMV liability shift—and it will affect retailers. For most NATSO members this means either new equipment or upgrades to their existing compatible equipment.
Besides the requirement to be compliant with the new rule within the store, shop and restaurant, fuel retailers also have to have card reader technology on the fuel pumps that uses cryptography to ensure credit card information is secure.
Stop Watch sat down with Dan Witkemper, director, North America Payment at Gilbarco Veeder-Root, to learn more about what truckstops and travel centers should know about EMV chip technology to ensure they’re ready by the upcoming deadlines.
Under the original guidance, fuel retailers have until Oct. 1 to install EMV chip-card readers at automated fuel dispensers. Recently, Amex, Mastercard and Visa announced that they will delay the Oct. 1 deadline for the installation of EMV readers at fuel dispenser stations to Apr. 17, 2021, due to the COVID-19 emergency.
NATSO, along with a number of fuel retailing groups, urged the major financial card networks to delay the EMV deadline because many retailers are experiencing equipment delays and a lack of technician availability.
NATSO and the other associations stressed that the EMV deadline was “causing additional stress for these businesses at the same time they are worried about their economic survival and the wellbeing of their employees and customers.”
Understanding the EMV Shift
The October and now April 2021 deadlines mark the liability shift associated with EMVs. “That is when liability shifts to the weakest link in the chain,” Witkemper said.
That could be the card issuer if they haven’t issued an EMV card or the card processor if they can’t process an EMV card. “It could also be the retailers if they aren’t able to accept EMV cards,” Witkemper said. “The first two issues have been covered, and 99.9 percent of cards have been issued as EMV.”
That means the liability will be shifted to the retailer that can’t process the EMV transaction. That leads to increased risk for the retailers. Witkemper said Connexus has done some research and predicts retailers in the truckstop and c-store industry will experience $451 million in counterfeit fraud in 2020. “That is only projected to grow from 2021 to 2027,” he said.
While Visa reported in a study “that fraud rates at the fuel pump are relatively low—1.3 percent of total U.S. payment fraud,” it will still be a significant dollar amount to those operators that are not compliant. Even a couple of hundred dollars a day in liability shift can make a huge impact on the monthly profit-and-loss statement.
What’s more, a survey by Connexus found that nearly 70 percent of industry respondents did not have EMV-compliant fuel pumps. According to Connexus, those who do not upgrade could incur costs of up to $201,000 per location over the next seven years.
Truckstops and travel plazas need to take the EMV shift seriously. “It needs to be understood and everyone should be marching toward that,” Witkemper said.
Witkemper recommends NATSO members work closely with their authorized service contractors and get a plan in place to ensure all updates are made by the EMV deadline. He explained that point-of-sale vendors are in the process of updating POS software and the forecourt needs to be updated with EMV hardware. “Once retailers do that, they avoid counterfeit fraud liability,” he said.
If retailers don’t take care of upgrades, they become responsible for fraudulent activity. Witkemper said that 90 percent of fraud that occurs at a site today is due to counterfeit. He added that if locations don’t take action, they will be responsible for that large amount of fraud, which they don’t see today.
“The thieves and cartels will move from the sites that lock themselves down to others, and the amount of fraud will grow at each site they go to as there are fewer and fewer sites where they will experience a fraudulent transaction,” Witkemper said.
He suggested operators start with a site survey and get a stern assessment of the equipment they have on their site. Without an assessment of what business owners have at the location or locations, they won’t know where to start. “Get in touch with an ASC (authorized service contractor) and then properly develop a plan,” Witkemper said. “Determine if you’re going to replace dispensers or use upgrade kits,” Witkemper said.
Locations with dispensers that are six-to-eight years old might choose to replace them. For anything newer, kits may make sense, Witkemper said, adding that locations could also opt for contactless EMV, which is a faster method of conducting a payment transaction on an EMV.
Witkemper said operators should ensure they have the right connectivity to the forecourt. “With an EMV transaction, there is so much more data that has to flow through that pipe,” he said.
Operators should also ensure their point-of-sale equipment is updated and that they have the right software and firmware. “Once you have the forecourt updated and proper connectivity is in place, an authorized service contractor will say the retailer is ready to go to EMV and will turn it on,” Witkemper said.
Preparing for the Transition
Witkemper told Stop Watch the good news is that there is still time for operators to make the switch. However, they shouldn’t wait too long.
“Our lead time on kits is eight weeks. Deeper into 2020, I could see that eight weeks going to 10-20 weeks. It is important for retailers to take this seriously,” he said.
Darren Schulte, vice president of membership for NATSO, said he is concerned that truckstop and travel plaza operators aren’t taking the transition as seriously as they should. “When they start getting 90 percent of those thing they don’t see today, they might see $200, $300 or $400 a day. It could be staggering,” he said.
Witkemper said he’d like to see retailers act now. “People need to be thinking through this and not waiting to the last minute,” he said. “If you wait to the end, you’re going to be in trouble.”
// Additional Resources
Learn more about the EMV liability shift through the following resources:
// Learn More on The Truck Stops Here Podcast
On NATSO’s podcast, The Truck Stops Here, Witkemper offers more information on what truckstops and travel centers need to know about EMV chip technology to ensure they’re ready by the 2020 deadline.
Listen to the episode above or at:
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