Mastercard reason code 4870: what it means and how to respond

What Mastercard code 4870 means and when it applies

Mastercard code 4870, “Chip Liability Shift—Counterfeit Fraud,” is filed when the cardholder denies authorizing a card-present transactionA transaction made with the physical card at a payment terminal or ATM, rather than online or by phone. and the fraud involved a counterfeit card. The code applies the EMVEMV stands for Europay, Mastercard, and Visa. It is the technical standard for chip cards and, for this code, helps determine who bears the loss. chip liability shift when the transaction does not record a valid chip read.

For the issuer to file 4870, all of these requirements must be present:

1. The cardholder denies authorization. The cardholder states that they did not authorize the transaction.
2. The fraud involved a failed chip read. At least one of these two situations must have occurred:
   • the counterfeit card was used at a payment terminal or ATM that could not read the chip; or
   • the transaction went through a hybrid terminalA payment terminal or ATM that can read both the card’s chip and magnetic stripe. For code 4870, that capability does not prove the chip was actually read., but DE 55Data Element 55 contains the data generated by the chip. It lets Mastercard verify how the card was read and how the cardholder was verified. was absent from the authorization or financial transaction message.
3. The genuine card had an EMV chip. The issuer had provided the cardholder with a valid chip card.
4. The fraud was reported before the chargeback. The issuer reported the transaction as counterfeit to the Fraud and Loss DatabaseMastercard’s database where issuers report fraudulent transactions. For code 4870, the counterfeit report must precede the chargeback.. Mastercard allows up to three days for that report to be processed.

Source for the requirements: Mastercard Chargeback Guide, Merchant Edition, May 19, 2026, “Issuer Chargeback,” pp. 584–586.

A valid chip read would have exposed the counterfeit card. When all the requirements above are met, the missing chip read shifts the loss to the acquirer, the institution that connects the merchant to the Mastercard network, and the loss may reach the merchant.

Code 4870 does not apply to online, telephone-order, mail-order, or recurring transactions. Those cases route to 4837 or 4863. Fraud involving a lost, stolen, or never-received card under the chip rule generally routes to 4871. For eligible US transactions, the chip liability shift covers ATMs and all POS transaction types.

The dispute is also invalid if the required records show a valid chip transaction, a properly identified technical fallbackThis occurs when the terminal tries to read the chip, cannot, and completes the transaction using another technology. To support a defense, the fallback must be identified in the transaction records., or a service codeA code stored in the magnetic-stripe data and sent in DE 35 or DE 45. A first digit of 2 or 6 tells Mastercard that the genuine card had a chip. showing the card was not a chip card. Properly identified contactless transactions, DSRPDigital Secure Remote Payment is an authenticated online transaction with its own Mastercard liability treatment. It is outside code 4870., and consumer-presented QR payments are also outside this code. Each of these situations is independently enough to bar code 4870.

Source for the exclusions: Mastercard Chargeback Guide, Merchant Edition, May 19, 2026, “Transactions ineligible for chargeback,” pp. 580–581.

Who files the dispute and what happens next

The issuer files code 4870 in MastercomMastercard’s system where the issuer files the chargeback and the acquirer submits its response and case documents.. The merchant does not respond directly to Mastercard.

Before filing the dispute, the issuer must gather one of these document sets:

1. A complete cardholder statement. A letter, email, message, or Form 0412Mastercard’s Dispute Resolution Form—Fraud. It records the conversation in which the cardholder or a representative disputes the transaction. stating both that the cardholder did not authorize the transaction and that the cardholder retained possession and control of every valid card on the account.
2. A statement plus certification. The cardholder’s statement that they did not authorize the transaction and an issuer letter certifying that counterfeit fraud occurred.
3. A company or government statement. This route applies only to a corporate card when the organization no longer employs the authorized cardholder.

If the issuer uses Form 0412, it must also close and block the account before the chargeback. Listing the account in the Mastercard Stand-in Account File with a “capture card” response has regional exceptions, including for certain cards issued in Latin America and the Caribbean.

Source for the issuer’s documents and controls: Mastercard Chargeback Guide, Merchant Edition, May 19, 2026, “Supporting documents,” pp. 585–586.

After filing, the dispute follows this order:

1. The issuer files the first chargeback. The value is returned to the issuer, and the acquirer reviews the case.
2. The acquirer files a second presentmentThe acquirer’s formal response in Mastercom showing why the chargeback should be reversed. It uses a ground Mastercard permits and the records required for that ground.. The standard deadline is 45 calendar days from chargeback settlement. The merchant gives its records to the acquirer, which files the response.
3. The issuer may file pre-arbitrationAn optional step where the issuer asks for review of the second presentment before Mastercard decides the case.. This step is optional under the standard rule, and Mastercard recommends proceeding directly to arbitration. If pre-arbitration occurs, the acquirer has 30 calendar days to accept, reject, or take no action; no action shifts liability to the acquirer.
4. The issuer may take the case to arbitration. The standard deadline is 45 calendar days from settlement of the second presentment, whether or not pre-arbitration occurred. Mastercard decides from the documented record, and the losing party pays the fees.

Source for the flow and deadlines: Mastercard Chargeback Guide, Merchant Edition, May 19, 2026, “Acquirer Second Presentment,” pp. 587–599; “Issuer Submission of a Pre-arbitration Case,” pp. 600–604; and “Issuer Submission of an Arbitration Case,” pp. 605–606.

How to reduce the risk of this reason code

The merchant should treat reading the chip and transmitting the chip data as parts of the same process:

1. Read the chip whenever the card has one. A compatible terminal is not enough if the sale is completed using the magnetic stripe or manual entry without a valid chip-read attempt.
2. Confirm that DE 55 is transmitted. For an online authorization, the chip data must appear in the authorization request and the First Presentment/1240 messageThe processing record the acquirer sends after the transaction to present it to Mastercard and calculate settlement.. If the transaction did not require online authorization, the acquirer must be able to retrieve the complete DE 55 for the defense.
3. Record fallback correctly. When the terminal tries the chip and switches technology, the authorization and first presentment must preserve the indicators for that event. Manually entering the card data without first trying the chip does not create this exception.
4. Keep transaction-level records. Ask the acquirer or processor for access to terminal, authorization, chip, and settlement data. Without those records, the merchant cannot prove which defense ground applies.

Source for chip reading, data transmission, and the fallback exception: Mastercard Chargeback Guide, Merchant Edition, May 19, 2026, “Transactions ineligible for chargeback,” p. 580, and “Acquirer Second Presentment,” pp. 587–594.