Gas Stations Hit Hard By EMV Changes
The growth of the Europay / Mastercard / Visa (EMV) standard in the United States hasn’t come without some difficulty. While there have been some significant advancements in the field, and points where fraud has declined, one unexpected casualty has emerged based on a report from Mizuho Securities: gas stations.
The report spells it out in brief: skimming fraud added to an incremental credit loss of between $8 million and $10 million just in the last quarter, and it’s a situation that will likely continue for the next several quarters until some kind of protective measure can be developed. While work has already begun to help provide new protective measures—and some of the benefits of such new protection are already visible—any gains from the new technology have been lost to fraud.
This fraud loss is because gas station pumps are exempt from any EMV conversion until October of 2020, which means credit card companies are still on the hook for the fraud in this case as they’re operating under old rules, according to the report.
With pumps still operating under old rules, and about the only places left to do so except for the occasional holdout, those looking for an easy fraud install skimming devices in gas station pumps.
This report illustrates two major points at once: one, EMV is actually delivering on security promises. While it’s been a bit of a hassle to get it in play, and more than a few places are out altogether, the fact that the one place that hasn’t adopted it in any large number is suddenly getting pummeled with fraud suggests that EMV does deliver. Two, simplifying EMV should be a major priority here; it’s already done a lot of good in the field, and the more places that can put it in play, the more likely it will be to do its work.
It’s kind of surprising that EMV worked this well. We’d seen so many issues around this technology up to the crossover date that it would have been easy to think it’d just collapse. Yet here it is, delivering such protection that the only real holdout is being assaulted by fraud routinely.