Debit-Card Security Plan Worries Gas Pump Owners
New debit card security requirements will prove costly to merchants; some will be forced to stop accepting debit cards.
LITTLE ROCK, AR – To comply with Visa’s debit-card standard that affects gasoline equipment, retailers face costly hardware upgrades at their pumps, including new PIN processors, the Arkansas Democrat-Gazette reports.
The new standard, which for Visa transactions takes effect July 1, 2010, will add roughly $3,000 per pump, said Nick Siddique, an Arkansas Shell marketer. For his 32 pumps, the $96,000 upgrade cost is prohibitive, so for now, he said that he’ll likely have to stop accepting debit cards.
"For the big [retailers] it's not a problem," Siddique said. "But for a small guy like us it is."
For retailers like Siddique, eliminating debit cards will mean that some customers will be forced to go inside their stores to pay, an inconvenience that will likely meet with resistance.
"It would of course be tremendously inconvenient for many consumers who routinely pay for gas with debit [cards]," said Judy Dugan, research director and energy expert at Consumer Watchdog. "It's an issue that ought to be solvable because you don't want consumers having to put more debt onto credit cards."
As a result, Dugan said that she thinks that the card companies or oil brands should assist retailers with their upgrades.
"It's unfair for the people at the bottom of the chain the way it's structured now, which is the consumer and the small-station owner," Dugan said.
Upgrade costs will be a reflection on equipment age, said Ann Hines, executive vice president of the Arkansas Oil Marketers Association. While she appreciates the security need for the upgrade, she sympathizes with her members who in many cases are unable to bear the financial burden.
"I think the credit-card companies who are making so much money should be able to help retailers with this process," Hines said.
Compounding the concern for retailers is the complexity of the PCI standards, whose implementation dates and rules lack consistency among card brands.
"It is extremely frustrating," said Jeff Lenard, vice president of communications for NACS. "The rules are complex, and the clock is ticking."
Gray Taylor, payment consultant for the National Association of Convenience stores, said that the council's emphasis on access (not letting a hacker access information), rather than encryption, is misdirected.
"We can comply with everything [card companies] tell us to do, and it's going to raise the prices [consumers] pay at retail, and they're not going to be more secure," Taylor said.
For most, the entire pursuit of PCI compliance has left the industry nothing less than frustrated.
"Every once in a while I hit something where I guess my mind refuses to accept it," Hines said. "It is complex, and I think I hit a stumbling block over the amount of money it is costing."
