By Dr. Art Harper
As we have moved beyond the first stage of EMV implementation via the point of sale terminals (POS), we have to look toward the next two stages: ATM and Automatic Fuel Dispenser (gas pump) terminals.
In 2016, we need to ensure our ATMs are EMV-certified before the October 2016 deadline. The next and most talked about EMV stage relates to Automatic Fuel Dispensers, which have an October 2017 deadline.
Why did gas pump terminals get the extension in the EMV process? As issuers, we know that when a counterfeit card is created, the gas pump is the first stop for fraudsters to ensure they can access funds using the card. Once they have a good transaction on the counterfeit card, the counterfeiter will go out and begin using the bogus card multiple times until the account is closed down. However, gas pumps cannot as easily be retrofitted to EMV standards like point-of-sale terminals.
To be EMV-ready, the fuel merchants will need to update the current wiring connections at the gas pumps. Today, the gas pumps are wired with a standard twisted pair (two-wire) connection. This type of wiring supports low bandwidth communications and will be too slow for EMV transactions. Therefore, the fuel merchants will need to upgrade the wiring to Ethernet connectivity for EMV. The Ethernet connectivity will provide the Cat 5/6 wiring necessary to process EMV transactions.
Upgraded EMV gas pumps will also have to be certified by state officials to verify that they are dispensing and charging correctly, a step that adds another layer of effort in the process. So when a gas station replaces the payment terminal, it also needs to re-certify the entire pump. The process of completing the rewiring and recertification tasks will be expensive and time-consuming, which is why the automatic fuel dispensers landed on the back end of the EMV liability shift process.
So what can we do in the meantime as an issuer? First, issuers should ensure their card programs have been upgraded to EMV. Second, if they have not completed the ATM upgrade process to EMV, they will need to work on updating any hardware and software so their ATMs meet EMV compliance this year. Lastly, the issuer needs to continue their education efforts around the EMV liability shift timelines and process.
Many consumers may believe the EMV process is over while we still have another 18 months or so for this process. The education of the status of EMV merchants, timelines and, most importantly, the use of EMV will be vital for processing and chargeback functions.
Meanwhile, until fuel dispensers are EMV-certified, merchants and consumers should be on the lookout for any skimming devices that may be attached to a gas pump. We have seen this spike in counterfeit transactions at ATMs and will expect to see similar activity at the gas pumps. Education will help cardholders know what to look for and understand the timelines for EMV conversion.
Dr. Arthur (Art) Harper is the director of card payment solutions at PSCU. Leading the EMV initiative at the company that is certified and was the first to issue debit EMV in the credit union market, he has reached and educated more than 1,700 people through internal and external webinars, EMV roadshows and one-on-one meetings.