Deadline approaches for gas stations to upgrade to EMV chip technology

Most gas stations are expected to employ EMV technology by the end of 2021


Most merchants had to convert to EMV technology in 2015, but gas stations secured an extension. The new deadline is April 17, 2021, but a third of gas stations are likely to miss it.

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Oct. 1, 2015, was the deadline for most merchants to convert to more secure chip card readers. Gas stations secured a five-year extension to October 2020, which was pushed out again by the COVID-19 pandemic. It’s now fast approaching on April 17, 2021.

Sometimes known as EMV – short for “Europay, Mastercard and Visa” – the guideline was established by leading financial industry players. It shifted the liability for fraudulent transactions to merchants if they had not upgraded their payment processing devices and the customer paid in-person with an EMV-enabled card (that is, a card with a secure chip). Dipping a chip card mostly replaced swiping a magnetic stripe contained on the back of the card, which was an outdated technology that is more easily hacked.

Previously, the financial industry footed the vast majority of fraud bills, since consumers are generally not liable for these losses. Technically, we’re on the hook for at least the first $50, but financial institutions usually waive that and make it a true zero-liability policy as long as the customer reports it promptly.

Why gas stations received an extension

The cost and complexity of the EMV upgrade is a much larger burden for gas stations than other retailers. Industry-wide, it’s believed to be a $7 billion undertaking, according to Conexxus, a nonprofit technology organization focused on the convenience store and fuel retailing industry.

A third of gas stations are likely to miss the April deadline, according to an August 2020 survey conducted by ACI Worldwide. That would actually represent remarkable progress. Around the same time, Conexxus reported just 14% of gas station owners had achieved full EMV compliance at all of their sites. None of them had more than 50 locations. Some 31% of station owners had not yet converted any of their pumps. And more than half had made the switch at no more than a quarter of their facilities. A silver lining: 97% expect to complete the transition by the end of 2021.

Conexxus Managing Director Linda Toth agrees the trend is moving in the right direction. In a recent conversation, she acknowledged some stations will miss the deadline, but she’s optimistic that more owners seem to be moving forward with EMV. Besides the cost, another obstacle is obtaining permits and finding certified installers and inspectors. These tend to be in short supply, and the pandemic has created additional hurdles.

In Toth’s experience, the industry is prioritizing the pumps at the highest risk, which makes sense. This often follows geographical patterns. For example, there’s typically more fraud at stations located close to major highways.

Fraud is on the rise

Credit card fraud is the most common form of identity theft, according to the Federal Trade Commission. Instances more than doubled from 2017 to 2019. Worldwide, payment card fraud losses approached $29 billion, the Nilson Report stated. Much of this is concentrated in the U.S., since it’s a wealthy country that has lagged in fraud prevention.

While comprehensive data isn’t yet available for 2020, signs point to increased fraud. Per the FTC, there were more than twice as many identity theft reports in Q2 2020 – the first full quarter of the pandemic – compared with one year prior. COVID pushed more spending online, and chip cards don’t offer added protection for card-not-present transactions. In the physical world, gas stations are an easy target because most still rely on magnetic stripes rather than chips. In other words, e-commerce and gas stations represent the lowest hanging fruit for criminals.

Consumer action steps

I don’t believe that we can fully prevent fraud. But we can take steps to contain it:

Use a credit card instead of debit

If a criminal has your debit card information, they can gain access to the money in your checking account. With a credit card, a criminal will only be able to access your credit line. While you’re unlikely to be held liable for most fraudulent charges on both debit and credit cards, it’s much easier (and quicker) to remove a fraudulent charge on a credit card than it is to get refunded on your debit card.

Consider using a mobile payments service

If you don’t swipe your card at gas stations, you’ll avoid exposing the sensitive information contained on your card’s magnetic stripe. Samsung Pay works at most gas pumps. Google Pay partners with many leading gas brands to accept mobile payments, potentially throwing in added savings as a bonus. Apple Pay has the lowest acceptance rate at gas stations, although hopefully that will change along with the EMV transition. Many stations that begin accepting EMV transactions will also incorporate contactless functionality. In the interim, many gas station chains have unveiled their own mobile payments apps.

Pay inside with your phone, a card or cash

Most gas stations accept chip cards and mobile payments inside their convenience stores. This would be more secure than swiping at the pump. While cash is anonymous and therefore immune to identity theft, I prefer to pay with credit to earn rewards.

Bottom line

Be on the lookout for expanded opportunities to pay more securely at gas stations. Until then, practice smart habits to protect your identity while you fill up.

Correction: An earlier version of this story stated that the deadline for gas stations to adopt EMV technology is April 1, 2021, rather than April 17, 2021. 

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