The Hub’s Jared Scheeler Testifies on EMV Transition

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The Hub’s Jared Scheeler Testifies on EMV Transition


WASHINGTON, D.C. — The transition to EMV (Europay, MasterCard and Visa) at the point-of-sale (POS) and forecourt “has been a costly and burdensome undertaking,” Jared Scheeler, managing director for The Hub Convenience Stores Inc., testified Wednesday during a hearing of the U.S. House of Representatives Small Business Committee on behalf of NACS, the Association for Convenience & Fuel Retailing.

The EMV upgrade process has cost approximately $44,500 thus far per store, or a total of $134,500 for the four-store Dickinson, N.D., c-store chain, Scheeler testified.

“It does not appear that the card companies took into consideration the realities of operating a small business when they came up with their transition plans,” Scheeler stated. “In addition to the substantial time and money involved, the card companies have erected considerable obstacles that restrict my ability to reduce payment card fraud at my stores.”

C-store retailers needed to upgrade their in-store POS devices to EMV capable readers by Oct. 1 or risk being held financially responsible for fraud.

Forecourt dispensers do not need to be EMV enabled until Oct. 1, 2017. However, many experts have recommended c-store retailers begin upgrading dispensers now due to costs and work involved.

During his testimony, Scheeler stated the company purchased six new fuel dispensers at its Dickinson location that “have many years of useful life in them. The new dispensers were $17,000 each and the in-store POS reader was $2,000. So the upgrade cost us more than $100,000 at this site.”

Scheeler relayed he does not oppose efforts to thwart cyberattacks and data breaches. However, the U.S. EMV process has many faults, he stressed.

“As a small business owner, I am absolutely committed to improving payment card security,” he testified. “I have no problem making investments in effective fraud-prevention measures because retailers already pay the price for the unsecure payment card system. Unfortunately, … this very costly transition to EMV will not reduce fraud as much as it could and should, and my business will continue to suffer from a deeply flawed system.”

Specifically, Scheeler is referring to the fact that credit card and debit card purveyors are not mandating chip-and-PIN be part of the EMV transition. Currently, chip-and-signature cards are being issued instead.

“Disappointingly, the card companies have mandated an EMV transition that does not include a simple and very effective security measure that would substantially reduce fraud losses for everyone, including small business owners like me,” testified Scheeler, a member of the NACS board of directors. “Instead of migrating to chip-and-PIN technology in the U.S., the card companies have opted for a transition to chip without PIN. This is true in spite of the fact that the rest of the world has been moving to chip and PIN and that the data the card industry has used to justify the move in the United States relies on the use of chip and PIN, not chip without PIN.”

As CSNews Online reported earlier this month, the Federal Bureau of Investigation issued an alert stressing that PIN numbers should be used to authorize a transaction, as opposed to signature authorizations.