The EMV deadline has passed for retailers, and dipping a chip card is becoming more and more commonplace for customers. Informed customers know the importance of moving away from the vulnerable magnetic stripe to the more secure chip, so it’s concerning to these customers when they have to swipe at the pump. There is a reason we have to swipe, and it’s a pretty good one.
The complexity and financial burden of upgrading Automatic Fuel Dispensers (AKA gas pumps) is much greater than what retailers faced to become EMV compliant. Because of this, gas retailers were given extra time to prepare their pumps and have until October 1, 2017 to be EMV compliant. But will the extra time be enough?
According to NACS, the cost to move to EMV compliant pumps will be between $6,000 and $10,000 per pump. That seems like a hefty price tag considering NACS also reported the average card fraud associated with fuel pumps costs each store around $700 annually. However, these numbers could very well rise since EMV compliance has taken away fraud opportunities in other areas. “Fraudsters want to ‘get while the gettin’s good’ by stealing as much money from the credit card system as they can before higher EMV adoption rates block them out entirely,” says Sean Quay, NerdWallet’s resident credit card expert and a former strategist at Visa.
Gas retailers have no choice but to move forward and convert their pumps, or they’ll face shouldering the liability of fraud once October 1, 2017 is here. However, there may be another way — a mobile app.
According to Forbes, S-Bank in Finland came up with a mobile app that could eliminate the need for costly EMV conversions at gas stations. The gas station would download a software update to the POS system for the app to work with their pumps. This would allow the customer to pay via their mobile device without even pulling out their debit or credit card. Earlier this year, Shell announced an agreement to accept Chase Pay at gas stations in the United States, allowing their customers to securely pay using the Chase Pay mobile app.
The future of EMV-ready pumps is in the hands of gas retailers, and they have a year to figure it out. Will some hold off upgrading because of the historically low cost of fraud? Will mobile app adoption eliminate the need for a costly upgrade? Will retailers begin offering incentives to pay in cash to reduce potential fraud? As a customer, I’m anticipating my experience at the pump will change, but how it will change is still up in the air.