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Pandemic or no, card companies will not extend Outdoor EMV deadline for c- and g-stores
With the COVID-19 pandemic (rightfully) dominating the global news cycle, you might have missed a specific piece of news that greatly impacts fuel and convenience retailers. Despite all the economic disruption caused by the pandemic, leading credit card companies do not plan to extend what’s commonly known as the “Outdoor EMV” deadline.
This deadline is based on the liability shift for retailers who fail to implement Europay, MasterCard, Visa (EMV) chip readers into their fuel pumps. The current deadline — October 1, 2020 — remains in effect.
Retailer organizations, including the National Association of Convenience Stores (NACS), had formally requested an extension to the deadline. Visa officially denied the request on April 6, however, stating that it was still too soon to determine whether a delay would be necessary.
With the deadline now less than six months away, fuel retailers face an uphill battle to perform upgrades with increasingly limited resources and a lack of skilled technicians. The COVID-19 outbreak only promises to create longer backlogs for upgrades to take place. Retail businesses will find they are at risk of fraud, charge-back fees and potential fines if they fail to meet the deadline.
For those feeling the pressure, don’t panic. There’s still time, with solid planning and smart decision-making. Retailers that find themselves still needing to upgrade should:
- Engage with experienced vendors that have performed upgrades before.
- Make sure all underlying technology infrastructure (network, software, security protocols) is ready to support Outdoor EMV.
- Reach out to industry peers. Many fuel pumps already support Outdoor EMV, so leverage industry best-practices to streamline deployment.
No retailer wants to add anything else to their business must-do list at a time like this. There are compelling reasons, however, to invest in Outdoor EMV, even without a deadline. Having one just adds some urgency. No worries, you’ve got this.
Discussion Questions
DISCUSSION QUESTIONS: Should the credit card industry delay the Outdoor EMV deadline in light of the COVID-19 outbreak? Are the benefits of implementing the technology sufficient reason for retailers to take the necessary steps to be ready to go by Oct. 1?
Poll
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
Rob Gallo
Chief Marketing Officer, Impact 21
I really believe the credit card industry needs to extend the deadline. To expect retailers to pivot from this disaster to business as usual is more than presumptuous. Retailers need to weigh their exposure, infrastructure and their technical support framework before making the decision. It is important to get this done and if there is a grace period you can be sure it won’t be for long so plan and execute accordingly.
This is an ironic situation because, had these deadlines been four to six months ago, the result would have been fewer, if any, hand touches of credit cards and receipts during this pandemic. As it stands now, we don’t really know if the affected businesses are unable to physically become compliant, or if there is less than an important reason why they should not comply. If the former, then the credit card companies should postpone implementation.
I understand the security issues at risk which are driving the deadline, however, don’t we have bigger fish to fry right now? Will the world end if the deadline is extended? No. It might, so to speak, if we let this virus get out of control. And humans installing these technologies will only present more exposures to the virus.
A delay makes sense given the circumstances. Outdoor involves a greater level of complexity than indoor EMV. Much of the outdoor hold up was warranted due to delays in producing, certifying and bringing to market solutions that met the requirements of the convenience retailer. The card brands played a role in these delays as certification requirements for outdoor EMV were delayed as they evolved when compared to indoor EMV.
In addition, the conversion from swipe to EMV also requires a change in the customer experience. The indoor conversion had store associates to help the customers. In an outdoor transaction, there is no store associate to directly assist.
The new variables introduced by the COVID-19 situation include:
Although it might sound like the right step to extend the deadline further, the announcement was made over five years ago and extended for three years in 2017 specifically for the gas and c-store sectors. As a matter of fact companies like Visa who are mandating the deadline will see a drop in their VTA business tools that offer fraud monitoring to over 50,000 businesses in the U.S. – this reduced fraud by over 50 percent. The better option is compliance for the retailers and reduction of the existing $400 million in fraud based on magnetic strip transactions. There are multiple solutions out there to help limit fraud at the POS. Add to that the benefits that come with contactless EMV payments available on most modern payment devices, and it is a much better fit during the pandemic. A potential option would be either government subsidy or individual postponement of the deadline for businesses with financial hardship.
One last point — according to CSNews Tech Study 2019, over 82% of c-stores are already EMV-compliant and another 14% have started the process. A mere 3.6% haven’t started down this path — and more importantly, might have no incentive to do so. In these cases the liability shift may not offset the limited fraud or the cost of reverting to a separate payment or dispenser system.
Of course the credit card industry should extend the deadline. The economy has effectively stopped. As to the second question — the real issue is, will retailers have a choice?
C-store retailers are facing many issues during the crisis such as keeping their employees and customers safe. They are also facing a drop in revenue and profits. Instituting EMV is not inexpensive. It is reported that it can cost between $6,000 to $10,000 or more per dispenser. Older dispensers may not be upgradeable adding further to the cost. All this plus the difficulty in finding qualified technicians may mean many will miss the deadline. Bottom line, c-stores and other retailers face many issues and this deadline should be extended now rather than waiting to see what is going to happen in the next few months.
They have had the past 5 years to address this though … and already got the deadline extended once. Their not being ready has nothing to do with the pandemic. It is simply a lack of preparation.
It seems like a Catch-22: the longer we wait, the more info we have, but also the more confusion will result; and though it’s rather glossed over in the story, I imagine there are problems with delaying as well. So at this point I think all options should be left open … which sounds like what the industry is doing.
The article left out some key information.
The gas stations already got one 3-year extension. Recall other retailers were required to convert to EMV in the US or be responsible for all fraud a few years ago. The original deadline for the gas stations which was communicated in 2015, was to be 10/2017. In 12/2016, the credit card companies gave the gas stations an extension to 10/2020 because they had these same “reasons” for needing an extension as they have today: lack of available equipment, lack of qualified technicians, etc.
So now six months before the deadline which they already had a 36 month extension for, they are asking for another extension, due to the virus. What did they do with the past 30 months they have known about the deadline?
I do agree there have already been some delays to the original deadline which may make some not sympathize; however, not all of that is the fault of the c-store/fuel retailers themselves. Given the fact that most haven’t already implemented is essentially a sunk opportunity at this point, the decision to further delay must be made solely based on factors impacting the industry right now. And those factors which are related to the COVID-19 pandemic should absolutely result in an an Outdoor EMV deadline delay until at least spring of 2021. Rather than rush to try to implement with a remote and skeleton staff, an additional 6 month delay should give organizations the proper time to plan, validate, and certify these solutions prior to deployment.