Liability shift

Liability shift refers to the transfer of responsibility for transactions from the merchant to the card or , typically occurring in the context of electronic payments. A liability shift may take place when one party adopts enhanced security measures, such as EMV chip technology (Europay, Mastercard, Visa) or authentication.

The responsibility for fraudulent transactions usually falls on the entity (either the issuer or the merchant) with the least secure technology. For example, if a customer uses an EMV chip card or completes a transaction with 3D Secure authentication, but the merchant's terminal or payment system does not support these technologies, the responsibility for any fraudulent transactions may shift from the customer's issuing bank to the merchant.