EMV vs. Mobile Wallet: To Upgrade or Not to Upgrade?

Both options come at a cost; should one be put ahead of the other?

Richard Browne, Vice President, Marketing, Patriot Capital Corp.

consumer adoption of Apple Pay

ATLANTA -- Fuel retailers across the United States are in the midst of upgrading their gas-pump credit-card readers to accept EMV (EuroPay, MasterCard, Visa) “chip-and-pin” cards due to the upcoming liability shift. As of October 2017, fuel retailers may be liable for payment fraud unless they have upgraded their gas-pump hardware from old magnetic-stripe readers to EMV credit- and debit-card readers.

Gasoline retailers facing this investment expense are wise to ask, “Is this it for payment upgrades?” The answer is no; the mobile wallet is right behind EMV as a payment method that consumers will use.

ExxonMobil announced in early March that it has added mobile payments to Speedpass+, allowing customers to use Apple Pay for payments at the pump. The company announced a plan to have this solution implemented at more than 8,000 sites by mid-2016.

Projections suggest that mobile wallets, such as Android Pay and Apple Pay, will see rapid increases in use in the next three to five years. eMarketer estimates that use of mobile payments will expand from 19% to 31% of U.S. smartphone users by 2019. The value of mobile-payment transactions is forecasted to increase from $27 billion in 2016 to more than $200 billion by 2019.

Beyond the most common perception of the mobile wallet as a smartphone-enabled payment method, additional developments are emerging. The ability to pay for gas directly from cars is on the drawing board at both Ford and Honda. The launch of the FordPass payment platform is rumored to be as near as later this year, potentially enabling payments with partners including McDonald’s and 7-Eleven.

This begs the question: Should retailers skip EMV upgrades and go straight to the mobile wallet, which uses near-field-communication (NFC) wireless technology and requires additional payment hardware on the dispenser?

In upgrading a gas dispenser to EMV, the standard factory dispenser equipment on brands such as Gilbarco Encore and Wayne Ovation does not include an NFC reader as a standard feature, but rather as an extra-cost option.

In consideration of adding NFC payment early, consider that one of the benefits of contactless NFC technology is that it has few moving parts. Customers don’t swipe their card or insert it into a slot; they simply wave or tap their EMV card or smartphone in front of the sensor.

There are four payment upgrade options. Let’s take a look at each:

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Richard Browne, Patriot Capital Corp. By Richard Browne, Vice President, Marketing, Patriot Capital Corp.
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