MYRTLE BEACH, S.C. -- As convenience-store retailers weigh when to upgrade their fuel dispensers to meet Europay Mastercard Visa (EMV) standards in advance of the 2020 liability shift, one big question is how to maximize the return on that investment.
At the recent Gilbarco Retail Technology Conference 2017 in Myrtle Beach, S.C., a quick poll of retailer attendees found the biggest motivator to upgrade to EMV was avoiding chargebacks, followed by winning the business of security-conscious customers and not becoming the next retailer targeted by criminals.
The biggest selling points for upgrading to EMV? The enhanced security features were the clear winner, followed by the ability to offer new payment platforms such as contactless and 2-D barcode scanning, as well as remote access to the dispensers, through fuel-management platforms such as Gilbarco’s InSite 360. (Execs at Gilbarco said its EMV-compliant point-of-sale (POS) software will be ready by the end of the year.)
For retailers with sites that suffer excessive fraud, the need to upgrade is immediate, since the credit-card companies do not plan to postpone liability—and chargebacks—for these locations, as well as for any foreign fraud.
With security a top concern for fuel retailers in upgrading to EMV, they should also consider the benefits of adding near-field communication (NFC) capability to enable contactless payment for platforms such as Apple Pay and Android Pay, said Peter Carothers, product marketing manager of Gilbarco Veeder-Root, Greensboro, N.C.
“There are benefits with contactless from a security standpoint: Through tokenization, you’re ensuring a more secure payment and transaction,” he said. The actual payment process is also much faster than that for a chip card. And, “It will be the way millennials choose to pay. If your sites offer [contactless payment], that’s where they’re going to go.”
Another reason not to linger too long on upgrading to EMV: Criminals want to maximize their investment.
“These guys have built up an infrastructure to steal, and they’ve built the know-how, capability and equipment,” said Carothers. “They’re not just going to stop doing that because a handful of sites turned on EMV.”
A 'mad dash'
Because the United States is the last major market to roll out EMV, retailers can get a sense of how it may play out from the examples of other countries that have undergone the transition.
For example, in Canada, fraud plummeted 78% in 2013, the first year of EMV implementation, with double-digit declines for the subsequent three years, said Steve Scarince, the assistant to the special agent in charge of the Los Angeles fraud task force of the U.S. Secret Service, during a presentation on payment security.
Today, around 17% of credit-card fraud in Canada is happening at points of sale (POS) that have not upgraded to EMV, he said. Meanwhile, the remaining 83% is originating from outside of Canada, most likely from the United States, with magnetic-stripe transactions using stolen or fraudulent cards, said Scarince.
Post-EMV, there has been “a big increase” in “card not present” transaction fraud, with much of this from online purchases. The United Kingdom has seen a 70% increase in these fraud transactions. One issue is that the credit-card industry only suggests, but does not mandate, that online retailers require customers to enter a card verification value (CVV) number during transactions, said Scarince.
Despite the steep drops after it first implemented EMV, Canada went through a three- to four-year “POS fraud stabilization period,” where the financial and retail system had to work out hardware and software issues. Considering that Canada has 10% of the number of POS systems as the United States, experts expect this stabilization period to take much longer than three to four years, said Scarince.
Meanwhile, as the United States transitions toward a fully chip-card world, there are still “hundreds of millions” of credit cards available on the “dark web” that have been compromised but not yet used, said Scarince, noting, “Experts are starting to think we will see a mad dash, a ‘fire sale’ of these cards between now and 2020.”