Originally Posted by
tmiw
AFAIK liability is still the issuer if fallback is used. Some of the card networks have restrictions on the maximum share of transactions that can be fallback, however, so merchants may be hesitant to run them fearing going over that limit.
I think there is a lot of merchant ignorance there just like before chipped cards became common and there were reports of European merchants rejecting "American" cards. The chip error/fallback usually results in closer scrutiny of the card if the cashier is performing the transaction, which may lead to a rejection based on unfamiliarity with UnionPay and its interoperability with Discover.