Visa has announced that it plans to institute a liability shift for domestic and cross-border counterfeit card-present point-of-sale transactions starting Oct. 1, 2015. At present, fraud is mostly absorbed by card issuers. Beginning October 1, 2015, when a contact chip card is presented to a merchant that has not adopted contact chip terminals, liability for counterfeit fraud will shift to the merchant’s acquirer. Visa will allow an additional 24 months before a liability shift takes effect for transactions generated from automated fuel dispensers for petroleum retailers.
According to Visa, the liability shift encourages chip adoption since any chip-on-chip transaction, such as a chip card read by a chip terminal, provides the dynamic authentication data that helps to better protect all parties.
Visa also said that the U.S. is the only country in the world that has not committed to either a domestic or cross-border liability shift associated with chip payments.