Originally Posted by
Tyler2017
That defeats the purpose of having EMV in the first place!
Fallback is useful on occasion. Nearly every issuer leans on the side of convenience rather than security whenever possible; for example, if the store's having a temporary issue with the chip reader, it's probably not much more risk to approve such a transaction.
Originally Posted by
Majuki
It's not because of the EMV setup at the retailer. You're right that they've enabled EMV, but UnionPay doesn't use EMV for its chipped transactions. It uses the PBOC (People's Bank of China) protocol, which I haven't seen a US terminal support. This is also why it's increasingly difficult to use a Discover card in Mainland China through the interoperability agreement. Pretty much using a Discover card in China or a UnionPay card in the US is causing a fallback transaction.
My understanding is that PBOC and EMV are somewhat similar. In particular, both UnionPay/PBOC and other EMV cards have AIDs on them (per the "Terminal - POS" tab of
this document), which is probably how a terminal can support both. Unfortunately, that doesn't seem to be the case in the US at the moment, and I don't know when that'll change.