For Fuel Retailers, the Liability Shift for EMV Compatibility Could Cost Big Bucks

For Fuel Retailers, the Liability Shift for EMV Compatibility Could Cost Big Bucks

July 21st, 2020 - Payments, POS

By Brian DuCharme, Vice President of Product Management, TNS Payment Solutions

With the April 2021 deadline for EMV compatibility less than one year away, fuel and convenience retailers must upgrade their payment equipment at the pumps.

Of course. All retailers know that. It’s old news.

But not everyone realizes just how much not upgrading could truly cost — and it’s not exactly chump change. In fact, we’re estimating that it’s thousands for each station site, each month.

This is because after the deadline, in the case of fraud resulting from counterfeit card use at fuel dispensers, full liability shifts to the party in the payment chain with the least secure payment technology. That means fuel and convenience retailers who have not upgraded their AFD equipment to EMV will pay for fraudulent transactions and the cost of dispute management fees and fines.

So what does this full liability mean in real dollars?

TNS and Mercator Advisory Group found that — even using a conservative approach — the average cumulative liability shift of EMV at the pump over 12 months of operation, for a retailer with 12 locations evenly spread across low-, medium- and high-risk areas, is estimated to be $207,783 total.

If you’re curious what the liability shift might cost your own operation, you can estimate your potential costs using Mercator’s calculator on the TNS landing page, which:

  • uses data points from independent research and surveys on existing fraud rates at service station locations;
  • takes into account risk factors associated with each site; and
  • assumes a lower loss rate than the existing analyses and uses that as a starting point for its calculator, then applies it to risk level based on site location.

With the cost of doing business increasing all the time, no owner or operator wants to be saddled with this kind of bill due to something like fraud — and the simple way to try to avoid it is to upgrade to EMV sooner rather than later, because the deadline is coming either way.

Don’t wait until you’re stuck paying the literal costs of the liability shift. By upgrading now, retailers can gain better, more secure fuel dispensers, supported by the latest network connectivity technology, while meeting customer expectations and reducing chargebacks, and reducing the risk of fraud at the pump.

Brian is Vice President of Product Management for TNS’ FinTech Payments business and has over 20 years’ experience in the telecom and payments industries. At TNS, he leads a diverse global team and is responsible for driving product innovation for safer, more secure commerce around the world.

Find details for your appropriate TNS representative on our contact page