Gas station owners may have the most difficult task of any retailers in preparing for mobile payments and EMV cards because of their dated systems and equipment and because many of their customers fear that using their phones at the pump will cause fires.
"It's all still a bit messy," says Simon Gamble, the San Francisco-based president of North America for Mako Networks, a security provider for cloud-based networks.
"There is no easy way forward because all of it requires infrastructure and, yet, cards are still the cheapest [technology] and everyone knows how to use them," he says.
But there is some progress. On the mobile front, Exxon Mobile Corp. is testing a payments app at stations in Tennessee. As part of this process, it removed the signs that warned against using phones at the pump, citing an FCC finding that phone use is not proven to be a fire hazard.
Early feedback from the mobile payment tests "has been very positive," says Exxon spokesman Christian Flatham, who confirmed all of the phone warning signs are gone at the stations testing the app.
Isis, the mobile wallet venture backed by AT&T, Verizon Wireless and T-Mobile, included gas pumps in its recent tests in Austin, Texas and Salt Lake City, says Tony Abruzzio, business development executive for Isis.
"I don't see the cellphone warning signs anywhere anymore," Abruzzio says. "Tap-and-pay at the pump has been popular during our test."
It has also become common for gas station pumps in Canada to have contactless payment capabilities because the country included Near Field Communication technology as part of its conversion to EMV chip-based technology, Abruzzio adds.
In the U.S., however, EMV remains a stumbling block.
Accepting EMV-chip cards is difficult at gas stations that still use wires and modems to move data from the pump to the retail store's main terminals, Gamble says.
"With EMV, there is a lot more data flowing from the pump to the store," Gamble says. "EMV transactions could take a long time and back up business if the pumps are busy because of trying to move data through old connections and high bandwidths."
Even though petroleum retailers have until 2017 to convert their pumps and store terminals for EMV acceptance to meet the card brands' liability shift timeline, some have said they plan to disregard that deadline.
At a retailers' payments conference earlier this year, Bill Deichler, manager of payment methods for Arkansas-based Murphy Oil Inc, made it clear that his company may not make the upgrades to its 16,000 gas pumps to accept EMV.
Though it would face a greater liability for fraud if it does not meet the card networks' requirements, Murphy Oil would be comfortable with that outcome. "We handle fraud on our own, with our own police on payroll," Deichler said at the event.
"By the time we get it rolled out, a new upgrade would be coming," Deichler says of an upgrade he estimates will cost millions of dollars.
Even if EMV technology isn't enticing to gas stations, mobile wallets are, says Richard Oglesby, senior analyst and mobile pay expert with Boston-based Aite Group.
"Gas or convenience purchases are recurring, and are just the type of transactions that merchants are seeking to lock up by building ongoing relationships with their customers," Oglesby says. "But it's not because of EMV, it's because they are building out loyalty solutions and the mobile device is well positioned to enable loyalty solutions."
In other examples, the Merchant Customer Exchange mobile payments initiative counts Phillips 66, Shell and Conoco among its participants. PayPal Inc. is working with gas station payment terminal provider Gilbarco Veeder-Root to increase PayPal acceptance at the point of sale, with a mobile payment option planned. Neither Gilbarco nor PayPal responded to inquiries prior to deadline.
Still, gas station owners understand that card-based payments are here to stay and that the migration to EMV cards in the U.S. is more likely than ever, Oglesby says.
"Cards are moving to EMV, so merchants won't be able to use mobile to eliminate the need to support card payments," he says.