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Network

Mastercard

Code

4870

Response window

45 calendar days

Win difficulty

Hard

Dispute type

Fraud

Mastercard 4870 — Chip Liability Shift: What It Is and How to Respond

Warning: If your terminal doesn't support EMV chip, you will almost certainly lose this dispute. Mastercard's chip liability shift means that when a chip card is swiped (not dipped) and turns out to be counterfeit or fraudulent, the merchant bears full liability.

Mastercard 4870 is triggered when a chip-enabled card was processed using the magnetic stripe (swiped) rather than the EMV chip — at a terminal that was not chip-capable. If that transaction turns out to be fraudulent, liability shifts from the issuer to the merchant. This is the “chip liability shift” established by all major card networks in 2015.

The dispute is almost always decided in the cardholder's favour unless the merchant can demonstrate the chip was used or the terminal was chip-enabled. If your terminal was mag-stripe-only, there is no defence — the liability shift is automatic and absolute.

Common reasons you received this dispute

  1. 1Merchant processed a swipe transaction on a mag-stripe-only terminal
  2. 2Chip fallback was used without following fallback transaction rules
  3. 3Terminal was chip-capable but chip read was bypassed by the cashier or customer
  4. 4Third-party POS integration accepted swipe when chip was available
  5. 5Mobile or legacy card reader didn't support EMV chip

Can you win this dispute?

Fight this dispute if...

  • ✓Your terminal is EMV-chip-capable AND the transaction used the chip (chip read was performed, not a swipe)
  • ✓You can prove through your terminal's transaction log that an EMV chip transaction occurred for this specific charge
  • ✓Chip fallback was used and you have the fallback reason code documented in your terminal log

Accept this chargeback if...

  • ✗Your terminal is not chip-capable — the liability shift is automatic, there is no defence
  • ✗The transaction was swiped when a chip read should have been performed
  • ✗You cannot produce a terminal log showing an EMV chip read for this transaction

Evidence checklist

  1. ✅ Required

    Terminal configuration certificate showing EMV capability: Official documentation from your terminal manufacturer or acquirer certifying that your terminal is EMV chip-capable. This is the foundation of any defence.

  2. ✅ Required

    Transaction log showing chip transaction (not mag stripe fallback): Your terminal's detailed transaction log for the specific disputed transaction, showing an EMV chip read code — not a magnetic stripe entry mode. This is the direct proof that the chip was used.

  3. ⭐ Strongly recommended

    Acquirer's certification that your terminal is EMV-compliant: A letter or certificate from your payment processor or acquirer confirming EMV compliance at your location.

  4. ⭐ Strongly recommended

    Terminal receipt showing chip indicator: The customer-facing receipt from the disputed transaction, which should show a chip indicator (e.g. “CHIP READ” or “EMV”) rather than “SWIPED” or “MAG STRIPE.”

How to write your response

Your response must directly address the entry mode used for the disputed transaction. State clearly that your terminal is EMV chip-capable and that the specific transaction was processed as a chip transaction — not a magnetic stripe swipe.

Reference the EMV chip read code in your terminal log. The chip read code is the technical proof that the chip was read, not the stripe.

“We respond to chargeback [reference] under Mastercard 4870. Our terminal [ID] is EMV chip-capable (certification Exhibit A). The disputed transaction was processed as a chip transaction — our transaction log (Exhibit B) shows EMV chip read code [code], confirming the chip was used. We request reversal.”

Key deadlines

Response window: 45 calendar days from the chargeback notification date.

Chip liability shift chargebacks are among the hardest to win — your terminal log is your only direct defence, and it must show chip entry mode for the specific transaction.

Terminal logs should be retained for a minimum of 18 months to cover the full dispute window for any transaction.

How to prevent this chargeback

  1. 1

    Upgrade all terminals to EMV chip-capable devices: This is the only complete solution to chip liability shift. As of 2026, mag-stripe-only terminals expose you to full fraud liability on chip card transactions. The upgrade cost is far lower than ongoing chargeback losses.

  2. 2

    Ensure fallback transaction rules are followed: If a chip read fails and you must swipe, your terminal should log the fallback reason. Only use fallback when the chip genuinely cannot be read — never as a convenience shortcut.

  3. 3

    Audit your terminal fleet regularly: Older devices may not be processing chip correctly even if they appear chip-capable. Run periodic audits to ensure all terminals are certified and functioning as expected. Firmware updates can sometimes reset EMV settings.

  4. 4

    For mobile/card-reader merchants: use readers that support EMV: If you use a mobile card reader (Square, Stripe Reader, SumUp, etc.), ensure it is an EMV chip reader — not a mag-stripe-only dongle. Mag-stripe-only mobile readers are still available but leave you fully exposed to chip liability shift.

Frequently asked questions

What is Mastercard 4870?

A chargeback that occurs when a chip card was swiped at a non-chip terminal and the transaction was fraudulent — liability shifts to the merchant.

When did the chip liability shift happen?

In the US, October 2015. As of 2026, all terminals should be EMV-capable. Mag-stripe-only terminals expose you to full fraud liability on chip card transactions.

Can I win if I have a chip terminal?

Yes — prove the chip was actually read (not swiped) with your transaction log. Your terminal log should show an EMV chip read code for the specific disputed transaction, not a magnetic stripe fallback.

What if chip fallback was used?

Chip fallback (swiping after chip fails) is permitted under specific rules but carries risk. Document the fallback reason code from your terminal. Without a legitimate fallback code, the chargeback will likely be decided against you.

Related reason codes

MC 4871

Chip Liability Shift, Lost/Stolen

MC 4837

No Cardholder Authorization

Visa 10.1

EMV Liability Shift Counterfeit

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