'As more sites add EMV at the pump, fraudsters will likely focus on those pumps without EMV'

Wednesday 12 August 2020 15:09 CET | News

Mercator Advisory Group and Transaction Network Services (TNS) have revealed data regarding liability shift costs and how this makes retailers an easy target for fraud.

According to the press release, Mercator Advisory Group and TNS revealed that fuel and convenience retailers who fail to upgrade payment equipment at the pumps could face potential costs of, on average, USD 17,315 per site, or USD 207,780 over 12 months post liability shift. 

Because full liability shifts to the party in the payment chain with the least secure payment technology once the April 2021 deadline passes, any fuel retailer who has not updated their AFDs to support EMV-certified chip readers will automatically lose a chargeback inquiry and be subject to additional compliance fees. 

Consequently, it is crucial for owners and operators to upgrade to the most advanced network connectivity technology and reduce chargebacks, TNS reported. Accordingly, Brian DuCharme, the Vice President, Product Management for Payments at TNS stated: ‘As more sites add EMV at the pump, fraudsters will likely focus on those pumps without EMV – and no retailer wants to become known by their customers as an easy target for fraud’. 

Moreover, the full scale and size of this liability was unknown until recently, when Mercator performed a comprehensive, independent analysis, and created a calculator that revealed the potential true costs of this shift. Therefore, to determine these costs, Mercator’s calculator integrates data points from independent research and surveys on existing fraud rates at service station locations and takes into account risk factors associated with each site. 

Mercator assumed a lower loss rate than the existing analyses and used that as a starting point for its calculator. It then took the lower rate and applied it to only high-risk locations, decreasing this rate for medium and low-risk sites. 

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Keywords: Mercator Advisory Group, Transaction Network Services, TNS, liability shift, retailers, EMV, chargeback, compliance fees, chargebacks, fraud
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime