Gas stations get a break on EMV chip compliance

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2017 was supposed to be the year that fueling stations would be required to join other merchants and upgrade their pumps’ card readers for EMV — or pay for fraudulent transactions. The deadline was Oct. 2017. But Visa and MasterCard (who call the shots when it comes to the EMV transition) have pushed that deadline back three years to Oct. 1, 2020.

The deadline for ATMs (also set for Oct. 2017) will not be changing.

Why the deadline extension for gas stations?

Other merchants were required to start accepting chip-embedded cards in Oct. 2015, or start bearing the costs of fraud for counterfeit-card transactions. Some small merchants are still struggling to comply and even some larger merchants still aren’t compliant.

So why are Visa and MasterCard going easy on gas station operators? It’s mostly due to the complexity and expense associated with removing and replacing gas pumps. While updating traditional point-of-sale readers at checkout counters comes with its own expenses and challenges, the costs and logistical hurdles are even higher for gas stations.

In Oct. 2016, Bloomberg interviewed a gas-station operator who was faced with a cost of $100,000 for upgrading his pumps. Many gas station pumps are old and need to be replaced completely (which is more expensive than buying a new register or POS card reader). In addition, converting to EMV is more complicated than just changing out equipment – the new installation must also be inspected and approved, and there’s a shortage of technicians licensed to do so.

All this combined led to a predicted one-third of gas stations being compliant in time for an Oct. 2017 guideline, according to Bloomberg. Heading into the Oct. 2015 deadline for other merchants, the forecast for compliance was more optimistic — about 50 percent, according to MasterCard statistics.

Non-compliant fueling stations would have been held liable for the cost of counterfeit-fraud transactions, a situation that Visa and MasterCard obviously decided they didn’t want to wade into. Thus, the deadline extension.

“While we remain committed to moving businesses to chip technology as quickly as possible, we are also constantly monitoring industry progress and attempting to proactively address marketplace realities and known challenges wherever possible,” wrote Visa in a blog announcing the deadline change.

What this means for consumers

While bumpy, the transition to EMV generally makes card payments more secure. It makes it more difficult for thieves to use hacked transaction data (due to how the EMV chip scrambles data), makes traditional card-skimmers useless (because they can’t read chips) and makes it more difficult to create usable counterfeit cards.

So the delay for fueling stations may appear worrisome. After all, fuel pumps are unattended and have long contended with skimmers – devices installed by thieves that steal data off cards’ magnetic stripes. Plus, thieves like to use unattended card-readers (like those at fuel pumps) to test if a counterfeit card is working. With EMV compliance pushed back three years, these things are still a threat.

Even so, consumers have robust protections when it comes to fraudulent transactions made with their cards or cards cloned form their card data. While disputing transactions and ordering a replacement card can be inconvenient, most major credit-card issuers have zero-liability policies in place to ensure cardholders will be reimbursed for any charges a thief makes. Federal laws (the Fair Credit Billing Act and the Electronic Funds Transfer Act) also offer a ground layer of protection.

You’ll still want to be sure to check your transaction history regularly because quickly reporting fraud to your issuer will help ensure you get refunded. And use this guide to help you spot card-skimmers on fuel stations in the wild. Or, pay inside — the inside register will probably have a chip reader.

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