What Does EMV Fraud Liability Shift Mean?

Modified on Thu, 17 Jan, 2019 at 3:41 PM

Previously, the card issuers held liability for card-present counterfeit fraud on credit and debit cards. However, in order to avoid liability costs and encourage EMV compliance, the card brands provided new guidelines. Effective October 1, 2015, the EMV Fraud Liability for fraud losses shifted to whichever party has implemented the least secure technology. This financial responsibility could be placed on merchants, merchant acquirers, or issuing banks and financial institutions if they are not EMV-enabled. However, if all parties are EMV-enabled, the liability typically stays with the card issuer.

Consider the example of a financial institution that issues a chip-and-signature card used at a merchant that has not changed its system to accept chip technology. This allows a counterfeit card to be successfully used. The cost of the fraud will fall back on the merchant.


Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article