Rule one: A customer swipes a magnetic-strip card at a magnetic-strip terminal. If the purchase is a counterfeit transaction, the merchant is generally not liable. Rule two: A customer swipes a chip card at a magnetic-strip-only terminal. If the purchase is a counterfeit transaction, the merchant has liability for it, because the card issuer has made the investment in chip technology, while the merchant has not yet invested in upgrading the point-of-sale terminal. Rule three: A customer dips an EMV, or chip card, at an EMV-enabled point of sale terminal. If the purchase is a counterfeit transaction, the merchant is not liable and the card issuer will carry the liability.

1. RULE ONE
A customer swipes a
magnetic-strip card at a
magnetic-strip terminal.
If the purchase is a counterfeit
transaction, the merchant is
generally not liable.
RULE TWO
A customer swipes a chip card at
a magnetic-strip-only terminal.
If the purchase is a counterfeit
transaction, the merchant has
liability for it, because the card
issuer has made the investment in
chip technology, while the merchant
has not yet invested in upgrading the
point-of-sale terminal.
RULE THREE
A customer dips an EMV, or chip
card, at an EMV-enabled point of
sale terminal.
If the purchase is a counterfeit
transaction, the merchant is not
liable and the card issuer will carry
the liability.
EMV USES AND LIABILITIES