The Good & Bad News Regarding EMV

LAS VEGAS — There is good news and bad news when it comes to convenience store retailers who have yet to upgrade their in-store point-of-sale (POS) devices to EMV (Europay, MasterCard and Visa), explained Gray Taylor, executive director of Conexxus Inc., during the “Are You Prepared for EMV?” educational session at the 2015 NACS Show.

EMV credit and debit cards carry a chip, which is intended to combat the growing problem of cyberattacks. The good news is although the liability shift for POS transactions passed on Oct. 1, convenience store retailers are only on the hook financially for fraud if banks have issued EMV chip cards to their customers. Only 20 percent of cards currently carry an EMV chip, stated Taylor.

The bad news, however, is that banks are expected to quickly issue EMV credit and debit cards. Based upon conversations Taylor has had, financial institutions will extract every dollar from retailers who do not upgrade to EMV at the POS once these cards are issued.

For those who have yet to upgrade, fellow panelist Kara Gunderson, POS manager for CITGO Petroleum Corp., recommended c-store retailers make the move quickly.

“Be an early adopter. You don’t want to be the last person on the block to do so,” she said. “Fraud always migrates to the path of least resistance.”

Before making the move, though, she recommends retailers conduct an individual site plan for all locations, even if they operate similarly. This should include an analysis of how many cashier stands, POS devices and automated fuel dispensers each store has. In addition, Gunderson stressed that POS upgrades cannot be conducted by c-stores who use dial-up Internet access.

“You must upgrade to broadband at all locations,” she said, noting the broadband service should have business-based bandwidth.

AFD UPGRADES

EMV upgrades at the POS are not the only thing c-store retailers should be concerned about. The preparation process for automated fuel dispensers, which carries an EMV liability shift deadline of Oct. 1, 2017, must begin now as well.

“I can’t stress enough with what I’ve seen at the POS that you need to make sure to order early,” said Gunderson. “There are only an estimated 3,000 technicians to do inside and outside upgrades.”

She acknowledged forecourt dispenser upgrades can be quite costly. If the costs are too high, she advised retailers to ask their suppliers if discounts are available. Savings can be obtained by offering someone else’s advertising at the pump. Financing is also available from financial firms.

Even once forecourt dispenser upgrades are completed, many c-store retailers may question what their return on investment (ROI) is, Gunderson continued.

“ROI could be tough to swallow,” she said. “But there are other benefits, including image upgrades, new features [of the new products], and updated technology and equipment.”

GOING MOBILE

During the educational session, panelists were asked if mobile payments could leapfrog the need for EMV-enabled transactions in the future. All agreed mobile payment transactions should grow, but that EMV upgrades are still necessary.

“You still need to have NFC [near-field communications] contactless payment devices to accept things such as Apple Pay,” responded Gunderson.

Panelist Linda Toth, director of standards for Conexxus, added that a great time to introduce mobile payment is immediately upon completion of EMV upgrades. “Combining them could increase your ROI,” she said.