EMV at the Pump: Should you wait until 2020?

Industry reports suggest that approximately 33% of dispensers in the market are capable of processing payments to EMV data-security standards with either a software or small hardware upgrade.  Both Gilbarco and Wayne began shipping “EMV-ready” dispensers in 2011.  Both manufacturers are reportedly close to or have released software to enable EMV, and there is a high probability that many networks will be processing EMV from the pumps by mid-to late 2017.

Consumers have quickly become used to using chip cards due to the increased security.  Crooks are also aware of EMV and are quickly identifying fuel dispensers that are, and are not, accepting EMV chip cards.

Two things are expected to happen in 2017:

Consumers are expected to shift their buying behavior to EMV-enabled gas pumps; and

Crooks will have a smaller number of sites to target.  Approximately 10% of dispensers are replaced every year.  This number suggests that, with no acceleration in upgrades, more than 50% of dispensers will be EMV-enabled in 2018, and 70% in 2020.  Combine these numbers with EMV implemented at restaurants and retail, and the potential places to commit card fraud becomes a small target.

Waiting to implement EMV at the dispenser will get more expensive.  Equipment costs, labor costs and borrowing costs are all predicted to increase by approximately 16% by the year 2019.  Furthermore, the current tax law provides a depreciation deduction equal to 50% of the adjusted basis of qualifying property in the first year it is placed in service for property placed in service in 2017.  The percentage phases down to 40% for property placed in service in 2018 and to 30% for property placed in service in 2019.

So what is the bottom line?  Delaying EMV upgrades at the dispenser means potential market-share loss and higher fraud risk.  Consumers, and crooks, will know who has made the move to EMV.