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Visa 10.1 - EMV Liability Shift (Counterfeit)

Counterfeit card used at a terminal that doesn't support chip reading. This is an EMV liability shift dispute.

Overview​

This code applies when a counterfeit card is used at a terminal that failed to process the chip. Liability shifts to the party that doesn't support EMV.

When This Code Applies​

  • Counterfeit card presented at POS terminal
  • Terminal did not read the chip (swipe fallback)
  • Terminal is not EMV-capable
  • Card has chip, but chip wasn't used

Conditions for Valid Dispute​

Issuer Must Verify​

  1. Card was counterfeit (verified by issuer)
  2. Card has EMV chip
  3. Chip was not used in transaction
  4. Cardholder did not authorize

Transaction Must Be​

  • Card-present (face-to-face)
  • Processed via magnetic stripe when chip was available
  • At a non-EMV or EMV-fallback terminal

Time Frames​

ScenarioDispute Window
Standard120 days from transaction date

Liability Shift Rules​

Merchant Liable When​

  • Terminal is not EMV-capable
  • EMV fallback to swipe occurred
  • Technical malfunction prevented chip read

Issuer Liable When​

  • Card doesn't have chip
  • Chip was read successfully
  • Merchant followed proper fallback procedures

Representment Options​

1. Chip Was Read​

Evidence required:

  • Terminal transaction log showing chip read
  • EMV cryptogram data
  • Terminal EMV certification

2. Card Had No Chip​

Evidence required:

  • Card imprint (if available)
  • Terminal transaction record
  • Acquirer confirmation of mag-stripe-only card

3. Proper Fallback Procedure​

Evidence required:

  • Two chip read attempts logged
  • Terminal error logs
  • Fallback was per Visa rules

Prevention Strategies​

Terminal Requirements​

  1. EMV-enabled terminals - All POS must support chip
  2. Contactless support - NFC reduces counterfeit risk
  3. Fallback procedures - Follow Visa guidelines for chip failures

Transaction Security​

  1. Never force swipe - Unless chip genuinely fails
  2. Two-attempt rule - Try chip twice before fallback
  3. Document fallbacks - Log every fallback reason

Win Rate Expectations​

Defense TypeExpected Win Rate
Chip was read (with proof)80-90%
Proper fallback documented40-60%
No fallback documentationUnder 20%

Common Mistakes​

  1. Non-EMV terminals - Automatic liability
  2. Forcing swipe fallback - Without attempting chip
  3. No transaction logs - Can't prove chip attempt
  4. Staff training gaps - Improper fallback handling
  • 10.2 - EMV Liability Shift Non-Counterfeit
  • 10.3 - Other Fraud Card Present
  • 10.4 - Card Not Present Fraud

Next Steps​

Got this chargeback?

  1. Pull terminal logs → Was chip successfully read?
  2. Check for fallback → Did you follow proper fallback procedures?
  3. Verify EMV certification → Is your terminal certified?
  4. Respond within 30 days → Representment Workflow

Prevent future 10.1 chargebacks:

  1. Ensure all terminals are EMV-enabled
  2. Never force swipe without two chip attempts
  3. Document all fallback transactions
  4. Review EMV requirements

See Also​