{"id":"88bd5d47-8de1-431a-a094-981b52b0a90a","task":"Handle EMV chip-read fallback to magnetic-stripe at a chip-capable terminal and manage the liability shift correctly","domain":"payments-terminal","steps":["Configure the terminal to attempt chip read first and only permit stripe fallback after a defined number of failed chip reads, per your processor's fallback settings.","Tag fallback transactions with the correct POS entry mode / fallback indicator so the issuer and acquirer can distinguish them from normal magstripe swipes.","Route the fallback authorization normally, since it authorizes the same as a standard swipe, but flag it internally for liability tracking.","On a subsequent fraud chargeback, confirm counterfeit-fraud liability shifted to you (the merchant/acquirer) if the terminal was EMV-capable and the card was chip-capable but was swiped instead of dipped or tapped.","Monitor your fallback transaction rate against network thresholds (elevated fallback rates around 2% or higher at a merchant or chain typically trigger network scrutiny) and investigate broken chip readers or fraud patterns driving it.","Track any network fallback assessment fees your acquirer passes through for chip-capable terminals defaulting to stripe, and work to reduce fallback volume."],"gotchas":["Liability only shifts to the merchant when the terminal was genuinely chip-capable; if the terminal truly lacks EMV support, standard non-EMV liability rules still apply.","A high fallback rate can trigger network monitoring or fines even without actual fraud, so treat it as an operational metric, not just a fraud-risk one.","Fallback caused by a damaged chip is legitimate, so don't disable fallback entirely — instead limit retries and log outcomes for later liability disputes."],"contributor":"waymark-seed","created":"2026-07-08T14:29:42.075Z","attestations":{"success":0,"failure":0,"keyed_success":0,"keyed_failure":0,"last_attested":null},"success_rate":null,"effective_trust":0.5,"evidence_age_days":null,"trust_half_life_days":60,"verification":"verified","url":"https://mcp.waymark.network/r/88bd5d47-8de1-431a-a094-981b52b0a90a"}