Did You Hear? $207,783 is the Average Cost of EMV Liability Shift

Did You Hear? $207,783 is the Average Cost of EMV Liability Shift

August 6th, 2020 - Payments, POS

By Dan Lyman, Head of FinTech Payments, North America

As a fuel retailer, you might be tired of hearing about the EMV liability shift, especially if you haven’t upgraded yet. For a business owner, it seems like just another thing to worry about in a year that has been a wild rollercoaster ride of unexpected challenges and new risks — and 2020 isn’t over yet.

But owners and operators who delay upgrading their AFD equipment aren’t just risking increased fraud. They also risk potential costs of, on average, $207,783 over 12 months post liability shift. That’s not exactly pocket change.

This is because full liability will shift to the party in the payment chain with the least secure payment technology once the April 2021 deadline passes. Any fuel retailer who has not updated their AFDs to support EMV-certified chip readers will automatically lose a chargeback inquiry and be subject to additional compliance fees.

This all adds up, according to new analysis from Mercator Advisory Group and TNS, into real dollars — about $17,315 per site over that 12-month post-liability-shift period. This estimate — which is actually a conservative estimation of the cost of the liability shift — is based on a few factors:

  • It assumes a 12-location fuel enterprise with sites distributed across low-, medium- and high-risk zones for card payment fraud.
  • It considers the cumulative impact of losses as the locations become targets for counterfeit card usage.
  • Compounding the losses will be the additional network penalties for excessive disputed transactions.
  • One caveat: The numbers could change dramatically depending on the risk position of each station site. That means retailers should use Mercator’s calculator to estimate their own liability based on the fraud risk for where their sites are located, which card schemes have posted on their websites.

By attaching hard numbers to something that wasn’t well defined before now, this calculation shows the liability shift could cost a significant portion of a retailer’s revenue. What’s more, as more sites add EMV at the pump, fraudsters will likely focus on those pumps without EMV — and no retailer wants to become known as an easy target for fraud among their customers.

Owners/operators, especially Independent operators should ask themselves: Is it worth the risk of not upgrading?

It’s most likely not — which means it’s critical for owners/operators to upgrade now to gain more modern fuel dispensers, supported by advanced network connectivity technology, while reducing chargebacks.  The technology upgrades required to enable EMV payments at the forecourt may also underpin opportunities for retailers to create a richer customer engagement platform that can drive additional revenue for their businesses.

TNS is here to help. For the last 30 years, we’ve helped merchants manage their data connectivity needs and solve complex challenges for retail systems they depend upon like encryption, switching, gateways and POS systems.

As a certified managed network service provider (MNSP), we understand the network challenges retailers face including those particular to Gilbarco and Verifone systems. To help retailers support multiple payment applications, improve uptime and increase productivity, our secure, end-to-end solution — TNSLink — allows retailers to connect their payment terminals cost-effectively to TNS’ global payments community.

Don’t wait until it’s too late to upgrade your outdoor payment terminals. Start your projects now — and reap the benefits of lower fraud risks, improved peace of mind, and better, more secure payments technology for your customers.

Dan Lyman is Head of FinTech Payments for North America. In his role he identifies and drives all sales and business activity within his region and contributes to global strategic decisions alongside his European and Asian counterparts, and the wider TNS corporate leadership t

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