Skip the Chip? 3 Consequences to Ignoring EMV
By Gilbarco Veeder-Root
The calm before the storm.
That’s what you’re feeling right now if you’re a retailer without an EMV-compliant forecourt. That’s because the flood of chargebacks is on the horizon and rising fast.
1. The Chargebacks Are Coming
“It takes 30 to 45 days for chargebacks to start showing up on retailers’ statements,” says Gilbarco’s Payment Marketing Director, Dan Witkemper. “So those who haven’t upgraded should review their network reconciliation statements to see how much they were impacted by counterfeit fraud chargebacks in the next few weeks.”
Why the time lag? First, the credit card user must recognize the fraud and report it.
Once investigated, retailers will get notified of the chargeback. While that process takes place, your unprotected pumps continue to rack up more fines, creating a vicious, business-killing cycle of fraud.
2. But Wait, More Fees!
Chargebacks aren’t the only costs unprotected retailers will feel.
Some major oil brands aren’t willing to risk their reputations on sites that won’t protect their customers.
In response, they are instating monthly fees for any site without chip card readers on the forecourt.
The takeaway here is, ignoring global payment standards will cost you – one way or another, and soon.
On top of all that, there’s a reputation problem to consider.
“Running an unprotected forecourt is like running an online store that gets hacked. Consumers are making the choice to purchase fuel from locations where chip cards are accepted.” Witkemper says. “Sites that are unable accept EMV at the dispenser may begin to see their monthly fuel volumes drop.”
3. Becoming a Target
Maybe your station never gets hit with fraud, but that’s about to change for many retailers.
Without EMV protection on the forecourt, retailers are effectively putting targets on their own backs as identity fraud factories.
“Businesses will begin experiencing what’s known as ‘fraud migration,’” says Witkemper. “Much like a virus, criminals need to find a welcoming host. Non-compliant fuel dispensers are what they’re looking for.”
Unfortunately, it’s easy for criminals to spot dispensers with weak security – even from the street.
Old vertical card readers are dead giveaways for unprotected pumps, inviting the fraudster to set up shop.
Once upgraded, fuel dispensers feature horizontal, EMV-ready readers, rendering most fraudulent magstripe cards useless – and thus, preventing chargebacks.
The Good News
It’s not too late, and there is protection available while you wait for installation.
Enabling zip code verification can help stave off some criminals trying to use counterfeit credit cards at the pump.
Another option is fraud detection programs. Right now, Visa is offering a free year of its Transaction Advisor service to sites that are in the process of upgrading EMV. The service uses an algorithm that attempts to identify risky transactions and force those customers to go inside the store.
Obviously, this isn’t ideal. As we all know, there’s nothing customers (criminals included) hate more than having to go inside the store to pay.
The Bottom Line
While the deadline may have passed, the urgency has never been higher to start your EMV upgrade process.
Getting started today is imperative, because that storm of chargebacks gains steam, the line for available technicians will grow even longer.