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Visa reason code 10.1: what it means and how to respond

Visa 10.1 covers counterfeit card fraud when the chip is not read or its data does not reach Visa. See who files, defense paths, and deadlines.

What Visa reason code 10.1 means and when it applies

Visa reason code 10.1, “EMV Liability Shift Counterfeit Fraud,” is filed when the cardholder denies authorizing or participating in a card-present transactionA transaction completed with the physical card at the point of sale, including when the card data is keyed into the terminal, as opposed to an online or telephone purchase. completed with a counterfeit card. For the dispute to qualify as 10.1, the card must have a chip and the transaction must qualify for the EMVEMV is the technical standard chip cards use to authenticate a transaction. The liability shift determines who bears the loss when the chip is not read or its data does not reach Visa. liability shift.

A 10.1 chargeback is valid only when all of the requirements above are met and at least one of these three failures occurred:

  1. The chip was not read. The transaction did not take place at a Chip-Reading DeviceA point-of-sale terminal or other payment device capable of reading the card’s physical chip.. In the record sent to Visa, this appears as a terminal entry capability codeA technical field that tells Visa whether the terminal could read the chip. A value of 5 records that capability; any other value means it was not recorded. other than 5.
  2. The chip data did not reach Visa in the online authorization. The transaction was chip-initiated and approval was requested at that time, but the acquirer, the institution that serves the merchant in the Visa network, did not transmit the Full-Chip DataThe complete data set generated by the chip, also identified as ICC data or EMV tag 55, which the acquirer transmits to Visa. to Visa in the Authorization RequestThe electronic request the acquirer sends to Visa to obtain real-time approval for the transaction..
  3. The chip data did not reach Visa in offline processing. The terminal approved the transaction without contacting the issuer, the bank that issued the card, at that time, but the acquirer did not transmit the data to Visa in the Clearing RecordThe record sent after the purchase to present the transaction and calculate settlement among the participants..

Source for all three conditions: Visa Core Rules §11.7.2.1, Table 11-8 (ID# 0030233). The merchant dispute guide repeats only the first two, so it is not enough by itself for an offline-approved transaction.

In practice, if the chip was not read or its data did not reach Visa, the merchant and acquirer bear the counterfeit-fraud loss. To avoid that liability, they must prove that the transaction was processed correctly or that another Visa exception applies.

If these conditions do not describe the case, check the correct code: 10.2 for lost, stolen, or never-received cards under the EMV rule; 10.3 for a key-entered card-present transaction outside that rule; and 10.4 for card-absent fraud.

Deadlines for each party under Visa 10.1

1 block represents 10 calendar days.

  1. IssuerFile the 10.1 disputeThe clock starts when Visa processes the transaction.
    Up to 120 calendar days
  2. AcquirerSubmit a Visa-accepted defense pathThe clock starts when Visa processes the dispute.
    Up to 30 calendar days
  3. IssuerRespond to the acquirer’s defenseThe clock starts when Visa processes the acquirer’s defense.
    Up to 30 calendar days
  4. AcquirerAsk Visa to decide the caseThe clock starts when Visa processes the issuer’s response.
    Up to 10 calendar days
These are the time limits set by Visa.Your deadline to submit documents may be shorter; confirm it with your acquirer.Source:Visa Core Rules, Tabelas 11-1 (ID# 0030212) e 11-11 (ID# 0030236)

Who files the dispute and what happens next

The issuer files the 10.1 dispute after the cardholder denies authorizing or participating in the transaction. The case is recorded in VROLVisa Resolve Online is Visa’s system where the issuer files the dispute and the acquirer submits the response and case documents.. The merchant does not respond directly to Visa at this stage.

Before filing the dispute, the issuer must report the fraud to Visa using fraud type code 4Visa uses this code to classify counterfeit-card fraud. The issuer must submit it to Visa before filing a 10.1 dispute.. When filing, the issuer must also formally certify:

  1. For every 10.1 dispute: the cardholder denies authorizing or participating in the transaction.
  2. If the transaction was key-enteredA card-present transaction in which the card data is entered into the terminal instead of being read from the chip.: the card was a chip card.
  3. If the original report used another fraud type: why the classification changed to type 4.

Source: Visa Core Rules §11.7.2.2, Table 11-9 (ID# 0030234), and §11.7.2.5, Table 11-12 (ID# 0030237).

When the issuer files the dispute, it returns the transaction to the acquirer and disputes the amount. The acquirer investigates. If it considers the dispute valid, it debits the merchant’s account and informs the merchant. If there are grounds to challenge the dispute, the merchant gives the documents to the acquirer. The acquirer presents the defense to Visa through a Pre-Arbitration AttemptThe acquirer’s formal request for the issuer to reconsider the dispute before the case goes to Visa for a decision.. Code 10.1 has no separate representment step.

Source for the process: Visa Dispute Management Guidelines for Visa Merchants, pp. 5–6, and Visa Core Rules §11.2.2, Table 11-1 (ID# 0030212), and §11.7.2.6, Table 11-13 (ID# 0030238).

Before building a defense, check whether this dispute is invalidProving any one condition is enough to challenge the dispute's validity.
  • The transaction was chip-initiated.
  • The transaction was an Emergency Cash Disbursement.
  • The transaction was processed as fallback: the terminal tried to read the chip but completed the purchase using another technology.
  • The transaction was a Mobile Push Payment, Visa’s term for a cardholder-initiated payment on a mobile phone or other mobile device to buy goods or services or move money.
  • The authorization record combines POS Entry Mode code 90, which records how the card data was captured, with a Service Code encoded on the magnetic stripe that does not indicate a chip.
  • The Authorization Request contained the CVV encoded on the magnetic stripe, which differs from the CVV2 security code printed on the card, and CVV verification was either not performed or failed.
  • The issuer had already reported fraud on the Payment Credential used to approve the transaction. This does not apply to fraud report type C (merchant misrepresentation), type D (manipulation of account holder), or reports related to declined transactions.
  • A delayed charge for a stay, trip, or rental includes all of these records: the delayed-charge indicator in field 63.3 (message reason code 3902), a Transaction ID linked to the earlier period, and an Imprint obtained at a Chip-Reading Device during that same period.
  • The transaction used the Visa Commercial Choice Omni Product, Visa’s virtual-account product for business-to-business payments.
  • Outside Europe, the transaction contained a Token, meaning a digital payment credential rather than an access or login token.

Source:Visa Core Rules §11.7.2.3 — Invalid Disputes, ID# 0030235

How to reduce the risk of a Visa 10.1 dispute

Visa recommends three measures to prevent new 10.1 disputes:

  1. Use an EMV-compliant terminal. Besides reading the chip, it must apply the Cardholder Verification Method required for the transaction, such as a PIN or signature.
  2. Process every chip card by reading the chip. Do not replace the chip read with manual key entry merely for convenience.
  3. Train staff to handle terminal failures. When a chip read fails, staff should follow the acquirer’s procedure instead of moving directly to manual key entry.

These point-of-sale measures are not enough if the chip data is lost later. When a transaction is chip-initiated and authorized online, the acquirer must transmit the Full-Chip Data to Visa in the Authorization Request. When approval occurs offline, it must transmit the data in the Clearing Record. Confirm with the acquirer or processor that both flows are configured and that the relevant records can be retrieved for each transaction.

Do not confuse manual key entry with fallback. In a fallback transaction, the terminal tries to read the chip before using another technology. Visa treats fallback as an independent condition that invalidates a 10.1 dispute, but the transaction record must show that it actually occurred. Keying in the card data without trying the chip does not create that exception and may satisfy the code’s chip-not-read failure if all other 10.1 requirements are also present.

Source for the prevention measures: Visa Dispute Management Guidelines for Visa Merchants, Condition 10.1, p. 20. Source for chip-data transmission and the fallback exception: Visa Core Rules §11.7.2.1, Table 11-8 (ID# 0030233), and §11.7.2.3, Table 11-10 (ID# 0030235).

Evidence the merchant and acquirer need to gather

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The merchant gives the documents to the acquirer, which responds in VROL through a Pre-Arbitration Attempt. A 10.1 defense must establish one path Visa accepts: an invalid dispute, a credit or reversal the issuer did not address, the cardholder withdrawing the dispute, or a delayed charge. First identify the applicable path, then gather the records it requires. A credit or reversal must include the amount and date, and a withdrawal must be a letter or email from the cardholder. For a delayed charge, both forms of proof are required: the link to the earlier stay, trip, or rental and the Imprint obtained at a Chip-Reading Device during the same period.

For transactions outside the United States, Compelling Evidence is not one of these paths. For a US Domestic card-present transaction that was key-entered and did not take place at a Chip-Reading Device, Item 15 adds a path: either evidence that the same Card was used in a previous or subsequent undisputed transaction, or a copy of both the identification presented by the cardholder and a receipt, invoice, or contract linked to that identification. CE3.0, Visa’s three-transaction mechanism, applies to code 10.4, not 10.1. A merchant must not require positive identification as a condition of card acceptance unless the Visa Rules require or permit it. Start with the reason for the dispute and the transaction records, not the number of attachments.

Source for the pre-arbitration paths: Visa Core Rules §11.7.2.6, Table 11-13 (ID# 0030238). Source for the scope and requirements of Compelling Evidence: Visa Dispute Management Guidelines for Visa Merchants, Item 15 and note 7, p. 54.

Frequently asked questions

When does Visa use chargeback code 10.1?

Visa uses the dispute condition "EMV Liability Shift Counterfeit Fraud" when the cardholder denies authorizing or participating in a card-present transaction completed with a counterfeit card. The card is a chip card, the transaction qualifies for the EMV liability shift, and either the chip was not read or the Full-Chip Data was not transmitted to Visa.

What proves that a 10.1 dispute is invalid?

There are two independent routes. The first combines terminal entry capability code 5 with Full-Chip Data in the correct record: the Authorization Request for an online authorization or the Clearing Record for an offline approval. The second proves one of the situations that independently makes the dispute invalid under Table 11-10, such as a chip-initiated transaction or fallback. The second route does not also require chip-read evidence.

How does the acquirer respond to code 10.1?

Code 10.1 has no separate representment step. Under the Category 10 fraud flow, financial responsibility initially rests with the acquirer. The acquirer’s only response is a Pre-Arbitration Attempt in VROL within 30 calendar days of the Dispute Processing Date, supported by one path Visa permits.

Can CE3.0 be used to defend a 10.1 dispute?

No. CE3.0, Visa’s three-transaction mechanism, applies only to code 10.4. For code 10.1, the only applicable item in Visa’s Compelling Evidence chart is Item 15 of the Visa dispute guide. Items 1 through 14 and 16 do not apply. Compelling Evidence appears as a pre-arbitration path only in the US row of Table 11-13.

How long does the issuer have to file a 10.1 dispute?

The issuer has 120 calendar days from the Transaction Processing Date.

What must the issuer do before filing a 10.1 dispute?

The issuer must report the fraud to Visa using fraud type code 4 (counterfeit). When filing, it must certify that the cardholder denies authorizing or participating in the transaction. For a key-entered transaction, it must also certify that the card is a chip card.

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