Visa Inc. pushed back its deadline for installing chip-card readers in U.S. gasoline pumps after station owners complained they didn’t have enough time to complete the multibillion-dollar upgrades.
Visa, the world’s largest payments network, will give merchants until October 2020 to adopt the technology, three years later than previously planned, the San Francisco-based company said Thursday on its website. Visa said it will monitor payment trends at the pump to help gas-station operators and card-issuing banks prevent fraud during the interim period.
“In some cases, older pumps may need to be replaced before adding chip readers, requiring specialized vendors and breaking into concrete,” Visa said. “There are still issues with a sufficient supply of” compliant hardware and software to enable upgrades by 2017, the company said.
Station operators will spend almost $30,000 per store to replace the payment systems at pumps, bringing the total cost for the industry to about $4 billion, data compiled by the National Association of Convenience Stores shows. Card fraud costs the industry $250 million a year, according to Conexxus, a firm that provides technology standards for convenience stores and gas stations.
Visa and rival Mastercard Inc. have been pushing for a migration to chip readers to head off counterfeit cards. The technology -- named EMV for founders Europay, Mastercard and Visa -- generates new codes for each transaction, while the codes on magnetic stripes are permanent and can be copied and stored by hackers for later use.
Banks are currently responsible for covering any fraud that happens on consumers’ cards at gas pumps. After Visa’s deadline, the liability for covering that fraud shifts to gas station operators for those that haven’t upgraded their terminals in time.
The decision to delay the deadline is the second time in a month that Visa has announced moves to appease relationships with merchants after years of tension between the two groups fueled by arguments over fees. Last week, the firm said it would revise its rules for using the new chip technology for debit-card transactions after some retailers claimed the requirements inhibited competition.
“While we remain committed to moving businesses to chip technology as quickly as possible, we are also constantly monitoring industry progress and attempting to proactively address marketplace realities,” Visa said in the statement on its website. “We believe we have reached a balanced conclusion for providing needed, additional time to merchants while continuing to push forward with the migration to chip.”
