By Michael Hughes

The so-called EMV liability shift has ushered in a tidal wave of change for businesses across the country. Now that some of the early dust has settled, the industry is taking a closer look at merchants’ attempts at making EMV-enabled payment solutions a reality. 

With high-volume transactions nearing $30 billion in annual revenue, the parking industry has a lot at stake when it comes to completing a successful migration.

EMV is not the first technology shift to impact the parking industry. 

Despite the continued presence of cash-only lots and single-space meters, the majority of parking operators began realizing the many benefits of electronic payment acceptance years ago. 

Debit and credit card acceptance created a smarter and faster payment process. Parking lot attendants no longer had to track down cash payments on foot, fuss with change or scribble down receipts. Transactions moved to cashier booths and automated receipt printing, which resulted in reduced queue times and a more efficient process for managing lot occupancy, including a significant reduction in shrinkage. 

The parking industry has always operated in both attended and unattended environments, so the journey to EMV must account for each scenario. Unattended payments, in the form of coin parking meters, were recognized early on as a convenient way for customers to make quick, on-street payments. When electronic payments met the unattended space, automated paystations, kiosks and in-lane devices began to proliferate in larger lots and garages. Lots that continued to employ parking attendants stationed them at multi-lane booths to facilitate cash or card payments via a terminal.

 

The EMV conversion, based on chip card technology, brings significant change to the parking industry for two main reasons: 

The first was the introduction of chip technology itself. The “chip” refers to an integrated circuit chip, found on newly issued cards, which stores sensitive payment information. With each transaction, the chip generates a dynamic and unique cryptogram sent to the issuer for real-time authentication. In contrast, magnetic stripe-card readers receive static payment information hard-coded on the magnetic stripe, which is more susceptible to card-skimming schemes and other types of fraud.

The second driver of change was the requirement for a cardholder verification method. The required CVM provides an additional layer of security – and complexity – for parking operators migrating to EMV. 

Businesses have the option of adopting chip & signature, which requires customers to sign a transaction receipt; chip & PIN, which requires a user-input personal identification number; or a third option: no CVM chip transactions, which employ secure chip technology without a verification method. 

(Merchants should be aware that “no CVM” transactions have different implications on fraud liability than CVM transactions.)

Regardless of which CVM parking operators choose to support, the replacement of hardware to accommodate the new chip technology is unavoidable. 

In unattended environments, in-lane and paystation hardware is being manufactured with embedded chip readers, and in some cases, the inclusion of PIN pads and screen displays. This may increase the size of unattended devices, thereby affecting their location within lots or street-side. 

In attended environments, parking lot operators are making the switch to chip-enabled terminals, which will impact booth logistics if combined with a transaction verification method. If conducting chip & PIN or chip & signature transactions, the position and design of the booth space must allow the customer unobstructed access to a PIN pad, or signing room, from within their vehicle. 

There’s also a common misconception around unattended parking as it relates to EMV, that the liability shift date is extended for unattended solutions, much like gas pumps. This isn’t the case: The liability extension applies to only the petroleum sector and doesn’t include unattended parking. For that sector, the liability shift date came and went in October 2015. 

Unattended-parking-solution manufacturers are continuing to work alongside payment providers to bring EMV-certified parking systems to market. Currently, a handful of EMV-enabled unattended parking solutions is available in the U.S.. When factoring in the time and cost involved in making a significant infrastructure change, it comes as no surprise that adoption has been lagging. 

Municipal lot owners seem to be ahead of the curve in the implementation of EMV technology, with the city of Little Rock, AR, making news for being the first municipality in the country to install an EMV-enabled unattended parking system (see www.parkingboxx.com/pr/parking-boxx-launches-first-emv-unattended-parking-system-united-states).

 

All parking operators should use the EMV migration as an opportunity to evaluate additional opportunities for change. EMV is not the only payment technology that delivers enhanced security for merchants. Direct solutions are available that offer a secure technology called end-to-end encryption. 

This technology ensures that clear-text account data are never released into the merchant’s environment and greatly reduces Payment Card Industry scope. 

Incorporating contactless and NFC functionality into the upgrade of devices is another way for parking operators to future-proof their payment systems, especially in the wake of mobile wallet innovations such as Apple Pay. 

Contactless capabilities are a strategic advantage for the parking industry, where customer turnaround is high, time is at a premium, and queues can escalate quickly in length.

How much a business is willing to sacrifice security is an individual choice. The parking industry is unique in the mixed nature of its transactions, which means there is less of an opportunity to educate customers on EMV, and – what some may argue – an environment all the more ripe for fraud. 

Although EMV is off to a slow start, history tells us that the parking industry has never shied away from implementing change that delivers direct benefits to its customers. With EMV’s insurance against fraud, and new hardware options that combine chip and contactless functionality, it is unlikely the speed of migration will lag for much longer.