Visa says that merchants have lost 62% less money to counterfeit fraud since 2015. This can largely be attributed to the switch to using machines that read credit cards with chips, technology that is significantly safer than a traditional magnetic strip card. To boost security, Visa Inc. and Mastercard Inc. have set deadlines for merchants to make the change. According to an article from Bloomberg, this could spell trouble for U.S. gas stations, many of which are far behind on the mandatory upgrade.
All U.S. gas stations are required to have modern pump transaction technology that can accept and charge credit cards with built-in security chips by October 1, 2020. If they do not, they become liable for any credit card fraud that happens at those businesses. This new reports suggest the stations are nowhere near ready.
This type of changeover reportedly puts more than $3.9 million in costs on the retailers. but money is only a small reason why businesses are having difficulties making the switch. A lack of available software, lack of available hardware, and waiting times for certifications have also affected the situation. A 2019 survey by non-profit convenience store organization Connexus found 70% of participants who owned gas stations have not upgraded their pumps.
The Merchant Advisory Group sought to have the 2020 deadline delayed, but it was already extended back in 2016. This time, Visa and Mastercard shot it down. Read more about the merchants’ difficulties and credit card fraud at Bloomberg.