Gas station liability shift two years away

You may remember the recent liability shift with merchants to accept EMV cards and how that made acceptance much more universal. That was intended to signal the end of the old magnetic strip and usher in a new era of card processing and yet it hasn’t. The final liability shift has yet to occur and it will not occur for another two years but if you own a business in this sector you should not be sitting around and waiting. This is your two year warning.

The final liability shift will occur in 2020 with an industry that most people today use in one way or another: service stations. Originally it was intended to have its liability shift in 2017 but it was pushed back for many reasons and it has not been sheer laziness or excellent lobbying.

The most obvious reason is that replacing the hardware in a gas pump is not as simple as replacing your POS terminal. Going into the shift there was a critical shortage of both hardware and software components that would be needed to upgrade a pump. Without the ability to perform the upgrade maintaining the deadline made little sense to major processors like Visa and it was delayed.

Many pumps would also not be able to handle the upgrade, whether it is because of the data connection or the electrical components. That means that a pump would need to be replaced and that is not a cheap proposition. Digging out a pump and installing a new pump can take several weeks and cost tens of thousands of dollars. New infrastructure may need to be installed and there are always environmental concerns when undertaking a project like this. For a large, chain service station that may not be as big of a deal as one pump can be replaced at a time but for smaller and independent stations this is a huge deal. Replacing the pumps would lead to down business for months and that is not something that many want to go through, especially if the pumps were replaced within the last few years.

In fact most service stations are independently owned, at least as of 2012 when measured by the US Census. 97% of them are. For stations with one or two pumps they most certainly don’t want to drive away customers for potentially a month or more. Many service station owners are not concerned, after all only 1.3% fraud occurred at a service station. Despite this reluctance many service stations are working on achieving their EMV certifications and new pumps are beginning to be installed, albeit slowly.

Waiting until the last minute is not a good option so there are a few things that can be done to avoid having to install new pumps. The most popular is called Wayne Connect from Wayne Fueling Systems that uses wireless technology to provide the speed needed to process an EMV transaction. It has been used in Canada and is an option for newer pumps.

Some companies have introduced mobile payment apps like Shell’s Fill Up & Go or ExxonMobil Speedpass. This still requires a hardware upgrade to the pumps but may not require newer pumps to be ripped out. Of course not every customer will be comfortable with this method either. If none of these options work the pumps will need to be replaced. The only other way is to make customers come into the store to pay, since the station probably has an upgraded POS terminal. While that might generate a few extra sales from the convenience store it may drive some customers away due to the inconvenience.

With the liability shit set for 2020 it is best for service station owners to have a plan. You may not be ready or willing to implement it but generating a plan and exploring your options is a start. Lay the groundwork now and do not wait until the last minute.