Gas Stations Convert To EMV Chip Card Acceptance From the Inside Out

Gas stations caught a lucky break a year ago when Visa Inc. and Mastercard Inc. postponed their planned October 2017 EMV liability shifts for unattended fuel pumps for three years. Almost no convenience store or stand-alone gas station chain would have been ready by then, retail petroleum executives say, and going into 2018 the pump conversion is still moving slowly.

When asked this week what percentage of U.S. automated fuel dispensers are ready to accept chip cards, one industry expert who requested anonymity pegged the number as “very low.” That’s not surprising considering that only six months earlier Gilbarco Vedder-Root, a big fuel-pump manufacturer, announced what it claimed to be the first EMV transaction coming from a U.S. pump. That leaves somewhere north of 1 million more dispensers to go.

“There is no chain out there that is rolled out, big or small, that is EMV operational on the dispensers,” says Gray Taylor, executive director of Conexxus Inc., an Alexandria, Va., a standards and technology non-profit that was spun off from NACS, the national convenience-store trade group.

What’s happening, according to Taylor, is that c-stores and gas stations are converting to EMV from inside the store first, and then out to the pumps. More so than with most merchants, electronic payments at gasoline retailers must be integrated into complex networks that include pumps on the outside, and point-of-sale terminals, controllers, wired or wireless systems, and related technology inside.

“That is a predecessor to getting outdoor ready,” says Terry Mahoney, a partner at Chicago-based W. Capra Consulting, which works with petroleum retailers and industry vendors.

Many stations still aren’t done, but work generally is progressing well, especially at larger gasoline retailers, according to Taylor. “The inside—we’re feeling pretty comfortable,” he says.

Mahoney predicts that some time in 2018 the majority of transactions inside c-stores will be chip-on-chip: a functioning EMV POS terminal reading an EMV credit or debit card.

Meanwhile, payment card-accepting hardware and software providers that supply petroleum retailers, including San Jose, Calif.-based VeriFone Systems Inc., have complained that the liability-shift postponements have delayed expected revenues because they supposedly gave a reason to gas stations to put off their EMV upgrades. Tim Weston, technology solutions sales manager at Austin, Texas-based pump manufacturer Wayne Fueling Systems LLC, agrees that has happened with smaller, independent c-store operators.

“As a group, they’re the folks that have taken their foot off the gas, so to speak,” says Weston, adding that some small operators hope the major oil companies will come up with subsidies to offset part of their conversion costs. Their hopes have yet to be realized.

Upgrade expenses are considerable. An EMV retrofit kit for one pump handling two opposite-facing dispensers can cost $5,000 or more. W. Capra Consulting has estimated the total U.S. conversion cost at up to $6 billion.

Beyond costs, a major emerging issue is the scarcity of technicians certified to do the EMV upgrade work. One c-store executive recently pegged the number at only about 3,000 in all of the United States. These technicians must visit approximately 150,000 gas stations, many with 16 pumps.

“That’s the most significant bottleneck out there,” says Weston. “That population of trained and certified technicians is a limited population.”

Taylor is of like mind regarding pumps getting certified as meeting EMV requirements. “We’re probably where everybody wanted to be two years ago,” he says. “It is a big bottleneck.”