Does 4870 apply to online transactions?

No. The chip liability shift covers card-present counterfeit fraud only. If you receive a 4870 on an ecommerce transaction, the chargeback is invalid under the code's own conditions and you should represent it on that procedural basis.

Am I liable if the chip reader was broken and we swiped the card?

Generally yes, if the card was counterfeit. Swiping a chip card on a non-functioning EMV reader is exactly the scenario the liability shift targets. Proper technical fallback with issuer authorization offers limited protection, but a persistently broken terminal is an open fraud liability.

Mastercard · Fraud

Reason code 4870: Chip Liability Shift

Code 4870 shifts liability for counterfeit card fraud to merchants who accepted a chip card without processing it through an EMV chip reader. If a counterfeit magnetic stripe copy of a chip card is swiped at a non-EMV terminal, the merchant rather than the issuer eats the fraud loss. This code only applies to card-present transactions and is the enforcement mechanism behind the EMV migration.

Issuer filing window

typically 120 days from the central site business date

Merchant response window

typically 45 days to respond via second presentment

Why 4870 chargebacks happen

A counterfeit card cloned from a chip card's stripe data was swiped at your terminal because it lacked EMV capability.
Your EMV terminal was misconfigured or not certified, forcing chip cards to fall back to magnetic stripe reads.
Staff used manual key entry for a physically present chip card instead of dipping it, removing the chip's counterfeit protection.
A technical fallback transaction was processed without following proper fallback procedures, leaving you liable when the card proved counterfeit.

How to fight a 4870 chargeback

Provide the authorization record showing the transaction was chip-read (POS entry mode indicating EMV) and included valid chip cryptogram data.
Demonstrate the card was not EMV-capable, since the liability shift only applies when a chip card is processed on lesser technology.
For fallback transactions, document that fallback was issuer-approved in the authorization response and processed per Mastercard fallback rules.
Check whether the issuer's chargeback meets the code's conditions; 4870 filed on a card-not-present transaction is invalid and should be represented on that basis.

How to prevent 4870 chargebacks

Deploy certified EMV terminals at every point of sale, including mobile and event setups, and verify chip reads are actually occurring in your transaction data.
Train staff to never hand-key a physically present card and to treat repeated chip failures on one card as a fraud signal rather than an inconvenience.
Monitor your fallback transaction rate; a rising fallback percentage usually means terminal hardware problems or an active fraud crew testing your lanes.
Enable contactless acceptance, since tokenized tap transactions carry EMV-grade cryptograms and eliminate stripe exposure.

Frequently asked questions

Does 4870 apply to online transactions?: No. The chip liability shift covers card-present counterfeit fraud only. If you receive a 4870 on an ecommerce transaction, the chargeback is invalid under the code's own conditions and you should represent it on that procedural basis.
Am I liable if the chip reader was broken and we swiped the card?: Generally yes, if the card was counterfeit. Swiping a chip card on a non-functioning EMV reader is exactly the scenario the liability shift targets. Proper technical fallback with issuer authorization offers limited protection, but a persistently broken terminal is an open fraud liability.

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