Mastercard to phase out magstripe cards: What that means for you

End of an Era: Mastercard Phases Out Magstripe Cards + Implications for C-StoresEnd of an Era: Mastercard Phases Out Magstripe Cards + Implications for C-Stores

The end of swipe is upon us. Mastercard has announced it is phasing out the use of magstripe cards.
Yes, after six decades of swipes, that little magnetic stripe on the back of your bank cards is going away. The move has plenty of implications for convenience stores that have not upgraded to outdoor EMV.

Starting in 2024, Mastercard will no longer require its credit and debit cards to have a stripe in most markets. By 2027, U.S. banks will no longer be required to issue chip cards with a magnetic stripe. Mastercard expects to eliminate magstripes by 2033.

Before we discuss what this means for c-stores, let’s remember how we got here.

Back to the Future

The magstripe was invented in the 1960’s to replace flatbed imprinting machines (aka knuckle-busters), which cashiers used to record credit card information.

So how were stores able to instantly verify a customer’s account? They couldn’t. Instead, card companies would send merchants a list of bad account numbers and the merchant had to match their own lists to verify purchases.

Fast-forward to today, EMV chips are used for 86% of face-to-face card transactions globally. Only 11% of consumers still prefer the magstripe, according to a December 2020 survey paid for by Mastercard.

That negative consumer sentiment is directly related to the lack of security measures surrounding magstripes. Criminals have proven they can easily steal consumers’ cardholder data using malware and skimmers to embed that stolen data onto counterfeit magstripe cards. On the other hand, cards with EMV chips are encrypted and cannot be so easily stolen.

What Does it Mean for C-Stores?Outdoor EMV Liability Shifts to Convenience Store Retailers

For convenience stores that have already upgraded their fuel dispensers with outdoor EMV technology, it’s business as usual.

For retailers who still haven’t invested in modern payment technology as mandated by EMV regulations, business is about to become even more complicated. Mastercard was the first to take this position on magstripes; but the other major card brands are very likely to follow suite with their own plans to phase out magnetic stripes from credit cards.

If retailers with old equipment don’t upgrade soon, their customers could be forced to use cash to pay for gas inside the c-store. As most fuel business owners know, the lion-share of customers pay at the pump. Less than a third of consumers still use cash at all. Taking the pay-at-the-pump option off the table is a near-automatic business killer.

The end of magstripe cards isn’t the only problem non-compliant retailers face. Many major oil companies are now charging non-compliance fees for any station without EMV-ready forecourts. Some are even pulling the payment terminals out of the pumps altogether to avoid fraud.

The Bottom Line

Skipping on EMV? Don’t Say We Didn’t Warn You…
These complications are nothing compared to the constant and immediate threat of chargebacks as a result of fraud migration. As more retailers turn on EMV at the pump, criminals are seeking out easier targets that have not been upgraded.

While there are some tactics retailers can use in an attempt to mitigate fraud, none of them are as effective or foolproof as the mandated EMV upgrade.

Ready to start protecting your business and customers from fraud with EMV-compliant payment technology?

Please feel free to contact us at 1-800-451-4021 or Email Us with any further questions or inquiries.

Looking for Gilbarco equipment? Click on the links below to visit our web store :

Pumps & Dispensers
Passport Point of Sale
Gilbarco Passport Point of Sale
Forecourt Payment Options
Gilbarco Forecourt Payment Options
Forecourt Merchandising
Gilbarco Forecourt Merchandising Options

Click here to search all Gilbarco equipment and parts listed in our web store.

The John W. Kennedy Company appreciates your business and continued support!


Patriot Industry News – How Will Trump’s Tax Cuts Impact You?

This blog post was reproduced from a Patriot Capital newsletter

Does Trump’s Tax Plan Mean Higher Costs for C-Stores?

President Trump has announced one of the largest tax cuts in history. The changes will impact most Patriot Capital newsletter image 1American businesses, including convenience stores.

The planned reduction of taxes proposed for “for corporations, small businesses and partnerships of all sizes” is the headline story. At the same time, the maximum personal income tax rate is proposed to be 35 percent and the number of personal tax rates would drop from seven tiers to three (35 percent, 25 percent, 10 percent).

Considerations for your business include:

  • lower tax rates mean higher after tax costs for equipment due to lower depreciation
  • if the Border Adjustment Tax comes into effect, higher prices for imported components and equipment
  • uncertainty around the fate of Section 179
  • acceleration of interest rate increase

For more on how the new tax proposal could affect your business, read the entire article here.

Three Factors to Consider When Purchasing Convenience Store Equipment

Chris Santy, President of Patriot Capital, shares some key points that need to be considered when deciding whether to invest in equipment upgrades in this article.

When making any investment decision, the first consideration always should be the return on your investment (ROI), Santy’s article discusses three important ROI concerns to consider:

  • What is the cost of the equipment or investment?
  • What will the equipment earn?
  • What could happen to make the return on investment different than expected?

Patriot Capital offers a variety of equipment financing options for C-stores, fuel marketers and jobbers. To get a quick quote, or find an advisor near you, visit the Patriot Capital website or call (877) 527-0383.

NACS Survey Reveals What Fuel Prices Would Trigger Driving Changes

Fuel customers will change their driving habits to decrease their fuel consumption once gas prices reach Patriot Capital newsletter image 2$3.37 per gallon, according to a new NACS Consumer Fuels Survey. The price would have to hit $4.43 before consumers will drastically decrease their driving.

The price of gas also affects how consumers think about broader economic issues. Other issues the survey explored include expectations on future fuel prices, generational differences in consumer attitudes, and consumer perceptions on the reasons for fuel price increases – the good news is they don’t tend to blame the fuel retailer.

Visit the NACS Fuel Resources Center to review a variety of 2017 C-store consumer opinion surveys.

Dirty Pumps, Restrooms Cited Among ‘Four Sins of Fuel Retail’

Filthy gas pumps, malfunctioning card readers, unwelcoming stores, and dirty restrooms are cited as the Patriot Capital newsletter image 3top “Four Sins of Fuel Retail” in a recent editorial by industry strategist Norman Turiano.

Cleanliness at the pumps tops the list. Turiano points out that female consumers are especially reluctant to touch a visibly dirty pump, and this can drive away business.

Dirty restrooms make customers question overall cleanliness, and particularly. wonder about the healthiness of on-site prepared food. Does your site have the right focus on the ‘Four Sins’?

Read the entire article in CSP Daily.

Consumer Optimism Remains High Despite Fuel Price Increases

Consumer optimism is at an all-time high despite rising gas prices, according to a NACS National Patriot Capital newsletter image 4Consumer Fuel Survey.  NACS reports that 61 percent of consumers feel optimistic about the economy, the highest number in the 4-year history of the monthly survey.

Drivers remain optimistic despite the fact that a majority of gasoline consumers expect prices to increase in the next month. Slightly more than half of all Americans report they expect prices to be “much higher” or “somewhat higher”, while only 9 percent expect prices to drop.

Traditionally, rising prices result in decreased consumer optimist. Four years ago, when 85 percent of Americans said that gas prices had increased, 41 percent were optimistic. However, gas prices were more than $1 per gallon higher in 2013 than they are today.


The John W. Kennedy Company appreciates your business and continued support!

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