Understanding the Forecourt EMV Liability Shift Delay
As most in the industry are now aware, the major card brands have announced an extension of the EMV liability shift date for fuel dispensers from October 2017 to October 2020. The new date has come as a surprise to many in our industry, and we expect that you have many questions. Therefore, we would like to share our perspective.
To read the specific announcements from each card brand, you can visit the following websites:
- Visa: https://usa.visa.com/visa-everywhere/security/emv-at-the-pump.html
- Mastercard: http://newsroom.mastercard.com/news-briefs/update-on-u-s-chip-card-migration-automated-fuel-dispenser-liability-shift/
- American Express: http://about.americanexpress.com/news/pr/2016/amex-extends-emv-fraud-liability-shift-date.aspx
- Discover: Coming soon.
While the 3-year delay will somewhat smooth out expected demand over the next few years, there are still several reasons why we believe the market will continue to upgrade:
- Visa has announced a Fraud Monitoring Program that will go into effect on the original Oct 2017 date that will shift liability for counterfeit fraud chargebacks at locations that see excessive fraud. This program will drive many regions of the country that see high fraud rates to continue assessing EMV upgrades to eliminate chargebacks.
- Gilbarco has been shipping EMV hardware since 2011, and a significant amount of sites have already obtained EMV equipment. Most of those sites will turn on EMV this year as the software from their POS providers is certified. As EMV is “turned on” at sites across the country, consumer expectations on chip acceptance will continue to grow, and security-conscious customers will migrate to sites that accept chip payments. Additionally, the frequency of fraud will migrate to non-EMV sites.
- Many retailers are continuing to upgrade their networks ahead of the 2020 date to take advantage of additional EMV-supported features, such as forecourt media and other merchandising capabilities, remote management for dispensers, contactless transactions and end-to-end encryption.
Gilbarco has always expected forecourt EMV upgrades to extend out through 2020 (especially for smaller retailers). Following the announcement, we now expect the demand to be spread more evenly over the remainder of the upgrade cycle.
We also see some significant positives that could result from this extension:
- More new dispenser orders over the upgrade cycle vs. retrofit kits as larger retailers now have less need to figure out how to upgrade to EMV across their entire network as inexpensively as possible in 2017/2018.
- The smoothing of the volume over the coming years will reduce operational complexities and constraints, including creating efficiencies in manufacturing, supply chain, and field technician resources, among others.
- The delay will also provide Gilbarco and our distributor partners more opportunities to attach new products and solutions to a greater portion of EMV units over the upgrade cycle.
We will certainly continue to partner with each of you in the coming months as we assist our collective customers in navigating this change and assessing plans for the next few years.
