CHICAGO — With major brands having nearly 50% share of the U.S. retail gasoline market, their exposure to the fuel consumer—and potential fraud at the pump—is considerable.

Most branded sites are owned and operated by wholesalers or dealers, so ensuring that all of them are safeguarding the fueling transaction is complex. And with liability for fraudulent transactions shifting to fuel retailers that have not upgraded their dispensers and point-of-sale (POS) to EMV standards by October 2020, time is running short.

The liability shift for indoor EMV compliance happened with relative ease—but the outdoor liability shift is proving to be an entirely different animal, said Robert Carroll, commercial payments manager for Shell Oil Products U.S., Houston, which has approximately 13,000 branded U.S. sites and more than 12% of retail market share, according to Oil Price Information Service (OPIS).

“When you introduce the idea of a pump controller to a petro POS system inclusive of the software that has to go into the payment terminal, then the pump has to talk to the POS system … then eventually talk to various acquirers and processors," Carroll said. "[So] you’re introducing a lot more complexity to the situation.”

However, Carroll believes things are going “fairly well” in Shell’s efforts to prepare its branded retailers for the EMV liability shift, which began three years ago. This year, it began uploading the first of several POS software upgrades for different dispensers to its Shell Vantage retail site system platform, beginning with the Gilbarco POS and Gilbarco dispenser combination. That upgrade covers about 5,000 sites, or about 30% of Shell’s retail network. The Verifone POS with Gilbarco dispenser upgrade is slated for midsummer, followed by Verifone POS with Wayne pumps, and NCR POS solutions in fourth-quarter 2019 and first-quarter 2020.

While Shell can assist its Vantage users with EMV upgrades, it can’t force all of its branded retailers to make what at times can be a very costly move. At Shell’s 2019 marketers conference, Carroll said he spoke to some who operate in states with traditionally lower fraud incidence, “and they’re really struggling with the decision,” he said.

“Ultimately, they have to weigh the capital costs with the benefits,” he said. “What we have shared with them, though, is that in some states where fraud has been minimal over the years, these particular fraud organizations will be … putting out feelers to find petroleum locations that do not have EMV and will take advantage of that.” He cited data shared by Visa that shows “when they hit, it’s big and hard, and it’s almost unpredictable.”

ExxonMobil’s Mobile Push

ExxonMobil, with more than 6% market share in 2018, according to OPIS, has also been making headway on EMV upgrades—and encouraging its customers to adopt mobile payment through its Exxon Mobil Rewards Plus app. ExxonMobil was an early mover on electronic cardless payment, launching its Speedpass RFID payment device nearly 20 years ago and since transitioning it into a key tag, which it officially retired in June.

“Nothing is more important to us than protecting our customers, and we are moving quickly to upgrade EMV across our network as quickly as possible,” said Mauricio Angulo, Americas Fuels Marketing communications manager for ExxonMobil, Houston, in e-mailed comments to CSP Daily News earlier this year. “That’s why we make a point to protect our customers with the Exxon Mobil Rewards Plus mobile payment app.”

Using mobile payment avoids the possibility of having PIN or ZIP code information entered at the fuel dispenser POS from being captured by hidden cameras installed by fraudsters, and it keeps payment data above the retail location level. “Mobile payment apps are a safer alternative because the transaction is between a user’s smart device and a secure payment hub,” Angulo said. “This gives consumers a more secure payment method, bypassing the card readers or terminals completely.”

“One of our guiding principles is that payment and private information never goes down to the store,” said Devin Miller, consumer experience manager for ExxonMobil Americas Fuels Marketing. “It never leaves our payment cloud, or the bank; it never leaves our payment processor and stays securely above site.”

Customers can enable the fuel pump from inside their vehicle and handle the payment from the Exxon Mobil Rewards Plus app. ExxonMobil is slated to release “a major update” to the app “in pursuit of a simple, better, more secure experience,” Miller said.

Another major brand focusing on mobile payment this year is BP, which later this year will launch a new BPme Rewards loyalty program to replace its BP Driver Rewards program, and to coincide with the launch of its BPme mobile payment app. So-called “high-value” customers who use the BPme Rewards app will earn a 5-cent-per-gallon discount on fuel purchases. “Most importantly, the fueling experience will be improved as consumers can easily pay and apply rewards without using the PIN pad on the gas pump,” said Michael Abendhoff, BP America Inc.’s director of media affairs for U.S. downstream, Houston.

To counter fraud, fuel retailers can’t rely on tech tools alone; they must continue to observe the basics of payment security.

“We continue to make sure wholesalers understand that EMV is not the [be-all and end-all] for counterfeit fraud or for any fraud, for that matter,” Carroll said. Ongoing inspections, maintaining security seals on pumps and training employees to be aware of forecourt activity are also critical elements, he said.

“Ultimately the consumer is impacted by it, and we want that secure payment experience,” Carroll said.