In news first publicized by Reuters and Bloomberg, Visa announced the decision to delay the implementation deadline for fraud-resistant EuroPay MasterCard Visa (EMV) “chip card” technology at the forecourt from October 1, 2017, to October 1, 2020. The rationale for this move has been the challenges associated with updating card readers at the dispenser function with this new technology. This not only represents the costs involved, but the physical ability to perform the required upgrade work by the old deadline.
As Visa noted on its website (HERE), “The fuel segment has its own unique challenges, which we recognized when we first set the chip activation date for automated fuel dispensers/pumps (AFDs) two years after regular in-store locations. We knew that the AFD segment would need more time to upgrade to chip because of the complicated infrastructure and specialized technology required for fuel pumps. For instance, in some cases, older pumps may need to be replaced before adding chip readers, requiring specialized vendors and breaking into concrete. Furthermore, five years after announcing our liability shift, there are still issues with a sufficient supply of regulatory-compliant EMV hardware and software to enable most upgrades by 2017.”
The National Association of Convenience Stores (NACS) has estimated that the cost will be roughly $30,000 per store to bring EMV to the forecourt for a total car industry cost of approximately $4 billion.
The first deadline for EMV technology inside the store passed on October 1, 2015. What these deadlines mean, essentially, is that after that date merchants who have not upgraded their card readers to support the new chip technology assume a “liability shift” for fraudulent transactions. Visa noted that so far more than 1.7 million merchants, or roughly one-third of the retail segment, has upgraded to EMV chip technology. The company claims to have already seen a 43% reduction in counterfeit fraud at these merchants.
Gray Taylor, Executive Director of Conexxus, noted in a NACS announcement on the deadline extension, “Conexxus and NACS have worked diligently over the past two years with the stakeholders to identify the very real challenges facing fuel retailers as they work to avoid liability shift and comply with EMV. I believe that the card brands have come to understand that these challenges are not of retailer creation, but a result of late specifications, certification complexity and supply chain constraints, rather than a lack of resolve to adopt EMV.
“We are still sifting through the details, but the announcement appears to not clearly delay liability in that retailers who experience higher fraud rates or those accepting foreign issued cards; so we don’t see this announcement as a true game delay, but a bit of breathing room to work out the challenges.”
Although the announcement came from Visa, EMV is a joint project with MasterCard and less includes that credit association as well.
