Gas EMV is a daunting task, but a triage approach is possible

The April 17 transition deadline for EMV at outdoor fuel pumps is nearly upon us. Failure to comply means operators, instead of the credit card companies, will assume 100% liability for chargebacks associated with fraudulent transactions at the pump.

Still, industry technology trade organization Conexxus reports nearly 40% of fuel retailers will fail to achieve full compliance across their sites by that time. The reality is that operators will not face immediate consequences if they fail to meet the April deadline, but the risk dramatically increases the longer they stall.

Large and small fuel retailers are taking different approaches to the EMV transition.

Larger retailers are facing challenges in scale. Upgrading pumps on what could be hundreds of geographically dispersed sites strains resources. While the ultimate intention is to complete the upgrade at every location, many of these larger operators are implementing a triage system, prioritizing the upgrade at individual locations with higher traffic and/or a higher historical incidence of fraud.

Smaller operators, which collectively make up a significant majority of the retail fuel market, are more likely to be grappling with the cost/benefit analysis of the EMV upgrade. Concerned about the price tag of up to $6,000-$10,000 per pump for the upgrade, and less concerned about the risk of fraud – many of these operators have adopted a “wait and see” approach. With the potential savings in chargeback liabilities, these retailers could achieve ROI within a few years. Over a period of seven years, Conexxus estimates operators will save more than two times their original investment costs in chargebacks. In weighing the benefits of transitioning, smaller retailers are also considering the changing competitive landscape and consumer choice. Customers increasingly may opt to purchase at more secure locations, equipped with chip readers, and to take advantage of technologies that enable contactless payment.

For retailers of all sizes, the EMV transition is a complicated process with unique challenges for every operator and location. Given the transition’s complexity, it’s understandable if fuel retailers will not meet the April 17 deadline. But it’s important not to be paralyzed by analysis.

Source: PaymentsSource