February 1, 2010
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News: Change At The Pump For Canadians
Buying gas has never been the same since the inception of the pay-at-the pump credit card options. Canadians will soon undergo another changing event at the pump. Visa and MasterCard will be introducing a new credit card with an embedded microchip that will help deter fraud. The chip will work only with a personal identity number (PIN) and will be more difficult to copy and counterfeit. It also requires the user enter his/her PIN number reducing the risk if a cardholder should lose the card. Although the change is aimed at reducing fraud and saving credit card companies millions, some Canadian fuel companies are upset over how the change is being implemented.
Fuel companies say Visa and MasterCard have given them a no win situation. Gas stations must pay the cost of the pump conversion for the new credit card and if they don't, they will have to absorb the expense of any fraudulent activity which could rise to monumental heights. Furthermore, dealers say that at $5,000 a pop per pump, the conversion costs will also be a hardship. According to a spokesperson for the Wilson Fuel Co. Ltd, Visa and MasterCard have given the credit card companies and gas station owners until October 1, 2010, to make the switch. The change goes into effect across Canada; however, Nova Scotia expects to get hit the hardest. There, the gas prices are regulated and little room exists for owners to pass the cost of pump conversion on the consumer.
Credit card companies are also upset over the change. They say they too must absorb the cost of converting to the new technology. Additionally, they say the new technology has not yet been approved for manufacturing nor have technicians been trained to install it. Gas companies also saying it will take close to a year before the conversion can be completed. So what alternative do the gas stations owners have? Many say they will opt out of installing the new technology and force cardholders to walk into the station to pay. Some say the card companies and gas station owners should work together to find a viable solution.