What is a fallback transaction?

What is a fallback transaction?

A fallback transaction happens when the cardholder inserts a chip card into an EMV compliant device, but there is a fault with the chip. The device cannot read the chip, but allows the cardholder to complete the transaction using the magnetic stripe on the card.

Note: Because the device is EMV ready, and there was an attempt to process using the chip, the merchant does not take on liability for that transaction.

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