Switch to Chip at Gas Pumps Delayed

Responding to the concerns of gas station owners, Visa® and Mastercard® announced in early December a three-year delay in their deadline for installing chip card readers  

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Switch to Chip at Gas Pumps Delayed

May 31, 2017

Switch to Chip at Gas Pumps Delayed

Responding to the concerns of gas station owners, Visa® and Mastercard® announced in early December a three-year delay in their deadline for installing chip card readers at fuel pumps in the United States. The move pushes the due date to October 2020 from the previous deadline of October 2017.

"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," Visa noted on its website. "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. 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."

In its announcement, Visa pointed out that fraud rates at fuel pumps are relatively low, accounting for less than 2 percent of total U.S. payment fraud, and that a number of readily available fraud prevention tools have been successful in driving fraud lower at fuel dispensers. Visa also said it will monitor payment trends at the pump to help gas station operators and card issuing banks prevent fraud during the interim period.

Visa noted that some older fuel pumps may need to be replaced before adding chip readers, which would require specialized vendors and breaking into concrete. This would add further to the station operator’s expense. Data compiled by the National Association of Convenience Stores indicates that operators will spend almost $30,000 per store to replace the payment systems at the pumps, bringing the total cost for the industry to about $4 billion.

Bloomberg reported that the decision to delay the deadline for fuel operators is the second time in a month that Visa has announced moves to appease merchants with whom it has disagreed over fees in the past. Previously, Visa had said it would change its rules for using the new chip technology for debit card transactions after some retailers claimed the requirements inhibited competition.

U.S. retailers are more than a year into chip card adoption at the point of sale and the associated liability shift from card issuer to merchant that took place in October 2015. The EMV® liability shift at ATMs is still scheduled to take effect as planned on October 1, 2017.

EMV is a registered trademark or trademark of EMVCo LLC in the United States and other countries. www.emvco.com.

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