Retailers Get Some 'Breathing Room' on EMV

SAN FRANCISCO — Visa Inc. and MasterCard Inc. have pushed back the deadline for installing EMV chip-card readers at gas pumps in the United States following discussions with retailers who stated they did not have enough time to complete the multibillion-dollar upgrades, reported Bloomberg Markets.

"It is a priority for MasterCard to ensure consumers can confidently shop anywhere, any time," the company stated. "We will be working closely with our fuel partners, station owners, industry associations and third-party vendors to ensure a smooth transition to EMV."

EMV is an acronym for Europay, MasterCard and Visa, the three companies that originally created the security standard. Under EMV liability shift deadlines, c-store retailers needed to upgrade their POS to EMV-ready readers by Oct. 1, 2015; at the ATM on Oct. 1 of this year; and at the forecourt by Oct. 1, 2017 in order to avoid being held financially responsible for fraudulent transactions.

Merchants now have until October 1, 2020 to adopt the technology. Visa stated that it will monitor payment trends at the pump to assist gas station operators and card-issuing banks in preventing fraud during the interim period.

Currently, banks are responsible for covering and fraud that occurs on consumers' cards at gas pumps, but after the deadline, that liability shifts to the gas stations operators who have not upgraded their terminals.

The EMV liability shift at ATMs will not change and will take effect as scheduled on Oct. 1, 2017.

"There has been great progress with EMV migration in the U.S. to date. More than 1.7 million merchants representing more than a third of storefronts are now accepting chip cards; 388 million Visa chip cards have been issued in the U.S., and we are already seeing a 43 percent reduction of counterfeit fraud at chip-enabled merchants," Visa said in a released statement.

"While we remain committed to moving businesses to chip technology as quickly as possible, we are also constantly monitoring industry progress and attempting to proactively address marketplace realities and known challenges wherever possible. Some of these challenges were anticipated as we embarked on the migration to EMV chip and others are unique to the U.S. because of the complexity of the environment and regulatory requirements that do not exist anywhere else," the company added.

One challenge for gas station operators is that older pumps may need to be replaced before chip readers can be added, which requires specialized vendors and breaking into concrete. Additionally, five years after the liability shift was announced, the industry still faces issues with a sufficient supply of regulatory-compliant EMV hardware and software to enable most upgrades by 2017.

Multiple industry associations commented on the delayed liability shift:

Gray Taylor, executive director of Conexxus, said, "Conexxus and NACS have worked diligently over the past two years with the stakeholders to identify the very real challenges facing fuel retailers as they work to avoid liability shift and comply with EMV. I believe that the card brands have come to understand that these challenges are not of retailer creation, but a result of late specifications, certification complexity and supply chain constraints, rather than a lack of resolve to adopt EMV. We are still sifting through the details, but the announcement appears to not clearly delay liability in that retailers who experience higher fraud rates or those accepting foreign issued cards; so we don't see this announcement as a true game delay, but a bit of breathing room to work out the challenges."

Randy Vanderhoof, director of the U.S. Payments Forum, commented: "The unique challenges facing the retail petroleum industry in upgrading their outside pay-at-the-pump systems to EMV have been an active part of the EMV migration discussions over the last year within the U.S. Payments Forum and its Petroleum Working Committee. Given the migration challenges for implementing EMV in the petroleum environment, Visa's and MasterCard's modification of the liability shift dates will be beneficial to the retail petroleum industry and the U.S. chip migration."

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