What is Liability Shift | Solidgate
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Liability Shift

 

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

The liability for fraudulent transactions is typically borne by the entity (either the issuer or the merchant) that has the least secure technology. For example, if a customer uses an EMV chip card, but the merchant’s point-of-sale terminal does not support chip technology, the liability for fraudulent transactions may shift from the customer’s issuing bank to the merchant.

 

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