Chargeback Management

Gas Station EMV Liability Shift

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Fuel merchants have had a big deadline looming overhead for several years now. In October of this year, the financial liability for card fraud perpetrated at automated fuel dispensers and other sites was set to fall on any merchant who wasn’t using EMV-enabled chip readers for card transactions.

That date was recently pushed back to April 2021, giving merchants additional time to make the necessary hardware and software upgrades, but merchants should still make haste to protect themselves. What does the EMV liability shift really mean for fuel merchants, and what will happen to those who haven’t gotten in compliance when the next deadline rolls around?

For convenience stores and similar merchants, the deadline for EMV compatibility came and went back in 2015. Fuel merchants, who often have to utilize larger and more complex payment systems in their automated fuel dispensers—the self-service pumps where most drivers get their gas—upgrading terminals and card readers is more difficult and costly, so they were originally given two additional years before their EMV liability shift would occur.

New call-to-actionThat deadline was October 1, 2017. As that date approached, and Visa saw that many fuel merchants were having trouble meeting it due to a variety of supply and logistical issues, they extended it three more years to October 1, 2020.

That deadline has been reset to April 17, 2021, but fuel merchants shouldn’t get complacent. There’s always a lot of money on the line where card fraud is concerned, and sooner or later Visa and the other card networks will insist that the days of the magnetic stripe reader come to an end.

What is the EMV Liability Shift All About?

EMV is a chip technology, developed by a consortium of banks and payment card networks, which stores card information in a much safer and more secure way than magnetic stripes. Magnetic stripe data can easily be read, copied, and otherwise compromised, but EMV chips are much harder for fraudsters to crack.

EMV technology has helped reduce fraud rates by as much as 76% in card-present transaction environments. It is particularly effective at stopping card skimming, a form of fraud that frequently takes place at gas pumps. Card skimmers are small devices that attach to card readers at payment terminals.

When the customer scans their card, the skimmer reads the data off it. The fraudster can then retrieve the skimmer and create a cloned card with the stored data.

Visa has been leading the push for EMV adoption by shifting the fraud liability for transactions made without using EMV, with other card networks following suit (American Express, Discover, and MasterCard have moved their deadlines to April 16, 2021).

Prior to the shift, liability for fraudulent transactions falls primarily on card issuers. After the shift takes place, merchants will be liable for fraudulent transactions that could have been prevented with EMV technology, but weren’t. In other words: if a fraudster clones an EMV card, and the merchant runs it as a magnetic stripe transaction, the merchant is liable for the fraudulent charges because an EMV reader would have flagged the card as counterfeit.

The way for merchants to avoid liability is to upgrade to EMV chip readers at all points of sale and never process EMV-enabled cards by running them through a magnetic stripe reader.

Why Do the Deadlines Keep Changing?

Visa’s explanation for the 2017 deadline extension was that fuel merchants were having trouble sourcing EMV-compliant products and getting them implemented on schedule, and that other anti-fraud tools were working effectively to keep fraud rates down.

Download the eGuide, 4 Reasons to Hire a Chargeback Management CompanyThe National Association of Convenience Stores, a trade association that represents many fuel merchants, has been petitioning Visa and the other card networks to extend the deadline based on the disruptions and uncertainty caused by the COVID-19 pandemic. The NACS asked for an indefinite postponement until the crisis has passed, but the new April deadline appears to be a compromise that the NACS finds acceptable for now.

Will this deadline hold? Nobody can say at this point when a viable treatment or vaccine for coronavirus will be found, but trying to cut costs by putting off necessary EMV upgrades is a risky move. For one thing, if you aren’t using EMV readers, you’re exposing yourself to fraud unnecessarily.

Many eCommerce merchants can only dream of an anti-fraud tool as effective as EMV, so merchants in card-present environments shouldn’t take this valuable asset for granted!

Whether April is the final deadline or Visa punts it down the field yet again, in practical terms it’s well past time for conscientious merchants to make use of EMV technology. By doing so, you will stop many fraud attempts from succeeding and protect yourself from financial liability.


The EMV chip is one of the most effective fraud prevention tools the industry has come up with. Implementing it can be expensive, depending on your infrastructure and requirements, but it completely eliminates some of the most widely-used methods of payment card fraud. Magnetic stripes are designed to be easy to ready without sophisticated technology, which makes it trivial for fraudsters to copy and clone them.

The tools that lift data off of magnetic stripes simply don’t work on EMV chips, and what’s more, the EMV chip encrypts and tokenizes payment data so that it can’t be intercepted and read while it’s being processed by the merchant.

Despite all these benefits, the card networks aren’t convinced that every merchant is ready to throw out their trusty and familiar swipe-to-pay terminals, and that’s why the EMV liability shift is being used to prod them along into compliance. Whether it’s an incentive or a penalty probably depends on how much fraud you’re currently dealing with.

It can be difficult for merchants to keep up with the demands of the payment card industry, and it’s not like going cash-only is a realistic option. Just keep in mind that payment systems, fraud prevention, and other aspects of the transaction process all touch on the core elements of effective chargeback management.

If you’re working with qualified chargeback experts, they can help you integrate all these tasks and process into a cohesive system so you can keep pace with the mandates, requirements, and rule changes that come with the territory when you accept card payments.

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