credit card | Countywide Petroleum

EMV-Header With the continued spread of data breeches, consumers are seeking any way to keep their personal information and money safe and protected. The EMV card, a.k.a. “smartcard,” incorporates the newest data protection technology, embedding an encrypted microprocessor chip in the plastic payment card. Unfortunately for retailers, these EMV cards require specialized terminals with smartcard readers and updated software.

Traditional credit/credit cards possess only a magnetic strip that when swiped all sensitive data is copied to the terminal. This un-coded, vulnerable data can be stolen by hacking into the terminal’s database or capturing the info through a “skimming device.” EMV is a major upgrade because it adds a microchip to the payment card that acts as a small computer, validating the authenticity of the card and the cardholder while off-line and generating coded data that changes with every transaction. Even if the data is stolen, it would not work because the coded data is always changing and never re-used.

To “encourage acceptance” of the new technology in the EMV cards, the major card companies are shifting the liability of certain fraudulent transactions from the card company to the retailer. In essence, if the retailer does not have the equipment that will interact with the EMV chip, the retailer will be responsible for all fraudulent transactions. This policy by the card companies is scheduled to take place effective October 2015 for all transactions inside the store, and October 2017 for all transactions taking place at the pump.

The new era of convenience for the customer carries with it a loss of profit for the small business. Paying at the pump with a credit card is faster and easier for the customer, but cuts into the profit of the location. In return for the privilege of accepting plastic, credit card companies charge retailers a processing fee for every card swipe. This swipe fee can range from 2% – 4% of the total purchase price. When fuel prices go up, credit card companies receive a windfall without providing any additional services, while the station owner sees margins shrink. What are station owners to do? It is not practical to refuse payment by credit card. Many stations are actively promoting their brand’s credit card. With lower processing fees than standard credit cards, branded gas credit cards provide the self serve convenience for the customer without the high credit card fees. Research has shown that when a consumer purchases a brand gas card, they become loyal to that brand, make more frequent stops to their favorite brand station and inevitably spend more money inside the convenience store. By using their brand credit card shoppers are also providing important data that the station can use to influence their marketing strategies and the merchandise they offer.

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