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Issues with regulatory-compliant EMV hardware and software to enable most upgrades by 2017 prompted shifting the compliancy deadline.

By Pat Pape, Contributing Editor

Citing technological and regulatory challenges, Visa, MasterCard and American Express recently announced that the U.S. deadline for installing EMV (Europay, MasterCard and Visa) chip-card readers at automated fuel pumps has been extended to Oct.1, 2020 from Oct. 1, 2017.

More than 1.7 million merchants—or about one-third of all U.S. stores—now accept chip cards, and the nation has already seen a 43% reduction in counterfeit-card fraud among merchants using chip technology, according to Visa. However, selling fuel comes with a complex set of challenges, and gasoline retailers need more time to make the mandated upgrades.

Companies now have three more years to migrate from traditional magnetic stripe-based payment card scanners to chip readers before they would incur any financial liability for fraud perpetrated at the point of sale (POS).

But preparing gas pumps to be EMV compliant is more difficult and costly than updating an in-store POS. While many existing fuel dispensers will be eligible for EMV-ready retrofit kits, some older fuel pumps will need to be replaced before chip readers can be installed.

Even five years after announcing the EMV liability shift, there are issues regarding a sufficient supply of EMV-compliant hardware and software, as well as enough professional installers, to ensure a majority of upgrades are completed by October 2017.

The deadline postponement doesn’t mean that gas station owners can take a vacation from their EMV upgrade plans. In fact, fuel retailers using the traditional, magnetic-stripe card readers could become liable for fraud losses even before the new deadline if their credit-card fraud increases beyond a certain level.

Currently, fuel-pump credit-card fraud is relatively low, making up an estimated 1.3% of all U.S. payment fraud. A number of available fraud prevention tools, have helped curb fraud activities at fuel dispensers, Visa reported, including the Visa Transaction Advisor (VTA).

In seconds, VTA analyzes nearly 500 pieces of data, such as past transaction history, to create a risk score and either approve the fuel sale or ask the customer to complete the transaction inside the store. According to Visa research, fraudsters asked to go into the store to finalize a sale will typically drive away instead.

**From Convenience Store Decisions March 2018