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Visa 10.1 - EMV Liability Shift (Counterfeit)

TL;DR
  • A counterfeit card ran at your terminal and the chip never got read. Visa moves the loss to whichever side skipped EMV.
  • The case turns on your terminal logs. Proof of a successful chip read wins it outright.
  • Cardholder filing window: 120 days from the transaction date. Your response window: 30 days.
  • Two logged chip attempts before any swipe fallback. That's the line between a defense and a certain loss.
  • Non-EMV terminal? No defense exists. Replace the terminal.

A counterfeit card ran at a terminal that didn't read the chip. Visa calls this an EMV liability shift dispute, and the side that skipped EMV carries the loss.

When This Code Applies

  • Counterfeit card presented at POS terminal
  • Chip not read (swipe fallback)
  • Terminal isn't EMV-capable
  • Card has a chip, but the 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 wasn't used in the transaction
  4. Cardholder didn't authorize it

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

ScenarioWindow
Cardholder files120 days from transaction date
You respond30 days from the dispute

Liability Shift Rules

Merchant Liable When

  • Terminal isn't EMV-capable
  • EMV fell back to swipe
  • 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 the chip read?
  2. Check for fallback → Did staff attempt the chip twice first?
  3. Verify EMV certification → Is the terminal certified?
  4. Respond within 30 days → Representment Workflow

Prevent future 10.1 chargebacks:

  1. Put every POS on an EMV-capable terminal
  2. Never force a swipe without two chip attempts
  3. Log every fallback transaction and the reason for it
  4. Review EMV requirements

See Also