Combating Fraud at the Pump & the EMV Shift


If you own or operate gas stations, chances are you know about skimmers – illegal card readers attached to payment terminals, like gas pumps, that grab data off a credit or debit card’s magnetic stripe without the customer’s knowledge. Shutting down fuel

thieves requires investing in and implementing new technology and notifying and reacting effectively to breaches. One way to protect customers is by implementing EMV chip card readers to protect customer data.

EMV has been implemented with the specific goal of reducing card-present fraud. One of the main concerns facing merchants during the switch to EMV technology is what’s known as the ‘liability shift’. This is the change in financial responsibility,

to either a merchant, bank or credit card company, should a fraudulent transaction take place. Merchants implementing EMV chip technology in the U.S. are encouraged to consult with their respective payment networks regarding applicable liability shifts and rules.

The deadline to comply at gas dispensers was not until 2017. However, card brands delayed its deadline for installing EMV chip-card readers in U.S. gasoline pumps from 2017 to 2020 after retailer discussions made clear that they would not have enough time to complete the multibillion-dollar upgrades. This will lead to counterfeit fraud chargeback liability for fuel merchants if EMV chip acceptance enablement is not completed by October 1, 2020.

In the interim, here are a few tools that you should implement to help reduce counterfeit fraud on automated fuel dispenser transactions:

  • Visa’s Transaction Advisor program utilizes Visa’s extensive transaction data and risk scoring capabilities to provide a real- time risk assessment for automated fuel dispenser Visa’s access to transaction information across merchant categories and merchant brands creates robust fraud risk analysis. This solution operates invisibly to the cardholder to ensure a positive customer experience.
  • Another option is to ask customers at the pump to enter a 5-digit ZIP code associated with their credit card before fueling. The concept is that someone who has a stolen card is much less likely to know the ZIP code associated with the card, especially at a store near a highly trafficked road, where people could be coming from a much greater distance than the immediate area and a specific ZIP code.
  • Velocity checking is also a good option, monitoring the frequency of transactions on the same card. The “Two-and-In” strategy is a good policy to apply for velocity checking. It works as follows: Two transactions for the same account number within a 24-hour period at the same location, or across the brand, will cause the third attempt to be directed into the store to complete the fuel purchase transaction.

The bottom line: security at the dispenser is needed today, not tomorrow. It’s vital for retailers to determine the right security method for their business. With the liability shift being enforced in October 2020, fuel merchants are wise to be ready sooner rather than later to provide customers with safer, more efficient transactions while also assuring you’ll be protected.