Navigating the EMV Liability Shift

What EMV liability shifts are and what does that mean for my business?

You’ve likely heard the noise about the liability shift surrounding the secure processing of EMV (Europay MasterCard Visa) chip cards. Some sources claim you need to implement EMV-enabled payment terminals as soon as possible, while others advise a wait and see approach. Determining the best course of action for your business can be confusing.

The truth is that the EMV liability shift means different things to different businesses. In the past, merchants were not routinely held responsible for fraudulent transactions that occurred through no fault of their own. After the liability shift, assigning “fault” is a lot more complicated.

We have created this tool to help you understand the basics of the EMV liability shift…, as well as the finer details of liability as of October 2015.

U.S. Liability Shift… Chip technology is becoming the global standard for credit card and debit card payments. To increase the adoption of chip technology, Visa, MasterCard, Discover and American Express have implemented EMV liability shifts for domestic and cross-border counterfeit transactions effective October 2015. Merchants who have not made the investment in chip-enabled technology may be held financially liable for card-present fraud that could have been prevented with the use of a chip-enabled POS system.

U.S. Liability Flowchart

The flowchart below serves as a high level guide to determining liability for disputed transactions under EMV liability rules. It is intended to be used only as a reference tool in association with the card brand’s rules.

Fallback Transactions

Fallback is the term used when a normal chip transaction cannot be completed at a chip-capable terminal. This occurs when the chip-reading device or terminal is malfunctioning and the transaction is completed using magnetic stripe or key entered. All fallback transactions must be authorized online and properly identified as fallback. The issuer assumes liability for properly formatted fallback transactions, approved by the issuer. Transactions which are declined by the issuer or the card or where all available AIDs on the chip are blocked must not be attempted in fallback.


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Patty Walters is the senior vice president of Merchant Products and Security at Vantiv—a role that gives her responsibility for all EMV strategy for the Vantiv Merchant business.
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