Visa implements a FALLBACK ASSESSMENT FEE, WHY?

Use the EMV Chip Reader on your terminals, NOT the Swipe Strip! 

Fallback transaction

Beginning April 1, 2021, Visa will introduced a new High Fallback Transaction Fee if you have fallback transactions greater than 10% of your chip card-eligible processing volume.

What are EMV fallback transactions? EMV fallback transactions occur when an EMV-enabled credit card is used in a chip card reader, but the payment cannot be completed using EMV chip reader. In these instances, the merchant may decide to “fall back” and process the payment by swiping the card through magnetic stripe.

Although we have seen an overall decline in chip fallback transactions, fraud associated with fallback transactions is on the rise. Fraudsters are devising ways to force fallback transactions, usually associated with counterfeit cards. The fraudsters’ methods target the card or the card insertion process with the terminal which are impacted to bypass a chip read and force a magnetic stripe read on a chip capable card at a chip capable terminal. 

Fraudsters' methods to steal purchases from merchant include:

• Card containing a blank chip – No chip read possible

• Card containing a chip with no matching AID (Application Identifier) for the terminal to process – No chip read possible

• Card contains clear tape or coating over the chip – No chip read possible

• Card inserted upside down or backwards into the terminal – No chip read possible

BEST PRACTICE

Monitor Terminal Performance

• Train staff to look for potential fraud issues on the terminal. 
• If your terminal malfunctions and "fallback" to SWIPE or KEY-ENTER transactions, please contact your processor as soon as possible.

BEST PRACTICE

To avoid unnecessary fallback transactions (@ $.10 each), configure the terminal to allow two or three chip read attempts prior to reverting to a magnetic stripe read transaction. This should help address erroneous insertions and partial chip reads to possibly reduce the number fallback transactions originating from your place of business. Call your processor to learn how to set this fallback attempts! 

PROCESSING AN EMV CHIPPED CARD

If you have a cardholder facing terminal/key pad and the cashier notices what appears to be multiple unsuccessful chip reads, instruct the cashier to ask the cardholder for the card and perform the transaction for them. Prior to inserting the card into the terminal, the cashier must review the security features of the card. 

Reviewing the card’s security features include:

• Does the chip appear/feel undamaged and uncovered (no tape or clear coating over it)?
• Are the first four digits of the card number printed under the account number on the card?
• Does the hologram function/display correctly?
• Is there a valid Expiration/Good Thru Date embossed on the card appearing below the account number?

If the card passes the security features review, the cashier should insert the card and attempt a final chip read. If the chip read is unsuccessful, the cashier should follow the prompts on the terminal and conduct a fallback magnetic stripe read transaction (@ $.10 EACH TRANSACTION). If the card does not pass the security features review, for the cashier should request a different form of payment from the cardholder.

If you need better equipment and a company that cares, call us Today! 

Merchant Processing Solutions Inc.
954-938-2420