What You Need to Know About EMVs and Chargebacks

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The Europay, MasterCard, and Visa (EMV) payment standard has had all the drama of an opera: an abrupt and sudden announcement that disrupted businesses, a difficult consumer adoption, a deadline that got pushed and pushed but arguably not pushed enough.

We’re way past the April 2021 deadline, however, the drama continues. This time, it’s about chargebacks. When gas stations aren’t EMV compliant, they are liable for their customers’ fraudulent transactions and banks are charging gas station owners with costs associated with that fraud. Here’s everything you need to know about chargebacks and the current state of EMV compliance at gas stations.

How Chargebacks Happen

There are two main reasons for a chargeback: an unauthorized transaction (i.e. fraud), or simply non-EMV compliance.

An unauthorized or fraudulent transaction generally stem from a stolen credit card for pay-at-pump transactions. This is the most common cause of a chargeback for gas station owners.  The credit card owner either reports their card stolen or disputes the charge. The card issuer will then review the charge. If the gas station where the fraudulent charge occurred didn’t have an EMV card reader, then the gas station will be liable for the charge as well as a chargeback fee.

Non EMV compliance is the main reason banks automatically charge back transactions.  If a gas station does not have EMV charge readers, banks can automatically charge back any transaction without notice.  Furthermore, if EMV readers are in place, however are faulty, a “fallback” takes place and a chargeback can be issued as well.

Particularly for business owners who operate smaller gas station chains or a single gas station, these charges can have a major financial effect on their bottom line.

EMV Supply Is Still Behind

EMV adoption has been slow, and included many hiccups. Most notably, gas stations have been behind on the adoption because they require chip-reading devices at every pump and inside their convenience stores. Supply chain issues have been exacerbating this issue, making it more difficult and expensive for gas station owners to obtain EMV hardware and software.

Require The Dip, Avoid The Swipe

EMV technology was created to avoid fraud and chargebacks especially. So far, it’s cut down on card-present fraudulent activity with some credit card companies saying unauthorized credit card purchases are down to less than 1.5 percent of their transactions.

For gas station owners, it’s critical to know that allowing customers to swipe and purchase gas, food, and showers means they are at greater risk for a chargeback because they’re ultimately liable for any fraudulent or unauthorized purchases. That’s not the case with a chip-initiated card-present purchase. EMV purchases are protected from chargebacks. 

Worried About Chargebacks? Schedule a Consultation with Financial Fuel Services.

Don’t let your bottom line drop below profitability because of fraudulent payments. Discover how you can efficiently transition to EMV compliance at your gas stations and receive high-touch guidance throughout the entire process. To get started and prevent chargebacks, schedule your consultation today with the experts at Financial Fuel Services.

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