The EMV shift: Gas stations still have lots of work to do
There are now under six months until the April 17th, 2021 deadline for independent gas stations to replace magnetic strip-reading card terminals that are EMV-enabled for chip-and-PIN.
It looks to be the final countdown to the deadline - delayed earlier this year for reasons almost entirely relating to COVID-19 - so now is a vital time to assess the progress gas station owners have made and, more importantly, the work still to be done.
The delayed deadline was unsurprising, given the impact of the pandemic on gas stations’ businesses and the challenges to implementation itself, such as limited supplies of technicians and hardware. Despite compelling reasons to consider extending the deadline, the liability shift date is unlikely change, regardless of the COVID-19 situation.
And while the cost of integrating new terminals is steep, the cost of not doing so is potentially even more severe. The impact of fraudulent activity at the pump, and a subsequent wave of chargebacks (that the gas station would be responsible for repaying in addition to fines from the card networks) could be catastrophic for businesses.
Those that don’t implement EMV at the pump not only run this risk, they also become even greater targets for fraudsters, as their competitors solidify their at-pump security.
Recent data released by Conexxus strongly suggests that gas stations have yet to make significant inroads in the compliance process, and in many cases are still significantly behind where they need to be to make the 2021 deadline.
In Conexxus’ EMV Preparedness Survey, compiled using in-field data collected between August 19thand September 4th, 2020, only 14% of gas station owners said that all of their sites were already compliant. No operators with more than 50 sites said that they were fully protected against the liability shift yet.
At the other end of the spectrum, 31% of site owners are not EMV compliant at a single location and another 24% have EMV terminals at less than 25% of their sites. These broad figures also reflect the situation with smaller and independent gas stations with one to 10 sites. Over half of these owners have less than 25% of their sites compliant and 43% have no EMV terminals installed at any locations.
More encouragingly, no survey respondents said they expected to have zero sites compliant by next April, but only 61% expect to be 100% compliant by then. And by cross referencing expectations of each owner for 100% compliance with the number of sites they operate, Conexxus believes that we will not see more than 50% of sites compliant before 2023.
When the survey is compared to previous data sets we can see some progress is being made; the percentage of owners that are 0% compliant has fallen from 70% in 2019, to slightly over 50% in Q1 2020 and now 31%. But the percentage of owners that are 100% compliant has remained relatively flat over that time.
Almost a quarter (22%) of gas stations that have not yet deployed EMV terminals also have not committed to an integration timeline, with most pointing to the high cost of conversion or the risk not justifying the expense. These operators should speak to their payments provider and reconsider their position.
Overall, gas stations - particularly those already working down on their integrations - still have time to meet the deadline, but there are hurdles to overcome. Two problems are lack of available hardware (identified by 87% of respondents by store count) and lack of software (cited by 89% of respondents). These bottlenecks in the process seem difficult, although not impossible, to clear.
But with the deadline fast approaching and no further extensions on the horizon, focusing squarely on accelerating EMV compliance is now the optimal approach gas station owners can take.