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Update: Visa and MasterCard Postpone 2017 Fuel-Pump EMV Liability Shifts Until 2020.

Update: Visa and MasterCard Postpone 2017 Fuel-Pump EMV Liability Shifts Until 2020.
Posted: Dec 2, 2016
Comments: 0
Author: Bill Lehman

Expensive and time-consuming initiative makes it tough for gasoline retailers to keep up.

Initially, the liability shift associated with upgrading the card readers at gas pumps, known as Automated Fuel Dispensers (AFDs), was set to two years after in-store POS terminals, due to the complexities of retrofitting or replacing AFDs. But, even those extra two years are proving insufficient for many gasoline retailers. In response to the delays, Visa and MasterCard are postponing their Oct. 1, 2017, EMV liability shift for U.S. AFDs until Oct. 1, 2020.

“Fuel pumps often feature integrated payments terminals, requiring in many cases the replacement of an entire pump, which can involve significant costs, environmental permitting, and heavy construction,” according to the Electronic Transactions Association. Upgrading pumps with chip card conversion kits can cost $20,000 to $30,000 per location. However, older pumps will need to be replaced, costing $50,000 to $80,000 or even higher per location.

Fraud rates at fuel pumps, typically involving the use of stolen or counterfeit cards, hovers around 1.3% of total U.S. payment fraud. While this could rise as other POS terminals become chip-capable, cutting off fraudsters’ avenues to exploit counterfeit cards, Visa believes that this can be controlled. A number of readily available fraud prevention tools, such as Visa Transaction Advisor, have been particularly successful in driving fraud lower at fuel dispensers. Likewise MasterCard offers its Decision Intelligence suite of products, which uses artificial intelligence to increase real-time approvals of genuine transactions and reduce false declines.

For issuers, this means that liability for fraudulent card use authorized by the issuer at AFDs remains with the issuer until October 2020.

 

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