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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​

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