Upgrading POS to EMV Chip & Contactless: Liability Shift, Reader Types and How to Migrate
A buying guide to moving a POS from magnetic-stripe to EMV chip and contactless (NFC) — what the liability shift means, the magnetic-stripe phase-out, reader and terminal types, what to look for, and a migration plan.
Why upgrade, in brief
If a till still relies on swiping the magnetic stripe, it’s carrying fraud liability, running on a technology the card networks are retiring, and asking customers to do something slower than the tap they now expect. Upgrading to EMV chip and contactless fixes all three — and often only the payment device needs to change. The case in brief:
| Reason to upgrade | What it means | |
|---|---|---|
| Fraud liability | Chip acceptance shifts counterfeit card-present liability off you | — |
| Stripe phase-out | The networks are retiring the magnetic stripe over coming years | — |
| Customer expectation | Tap (contactless) is now the norm — and the fastest | — |
| Usually a device, not a system | Often add an EMV/contactless reader to your existing POS | — |
How chip and contactless differ from stripe
The stripe and the chip carry the same card data very differently — and that difference is the whole security story:
| Magnetic stripe (swipe) | EMV chip (insert / tap) | |
|---|---|---|
| Data | Static data, easily copied | Dynamic, cryptographic per-transaction |
| Counterfeit resistance | Low — clonable | High — chip data can't be replayed |
| How it's used | Swiped | Inserted (dip) or tapped (contactless/NFC) |
| Speed | Fast but insecure | Insert slower; tap fastest |
| Direction of travel | Being phased out | The standard going forward |
Contactless is EMV too: a tap runs the same chip-grade cryptography over NFC in about a second. So “chip” and “tap” aren’t rival technologies — they are two ways to use the same secure EMV rails, and a modern reader supports both.
Liability shift and the stripe phase-out
Two policy forces make this an upgrade with a deadline, not an optional nicety:
| Force | What happened / is happening | |
|---|---|---|
| Liability shift | Liability for counterfeit card-present fraud moved to the party using the less secure tech (US: Oct 2015; similar elsewhere) | — |
| Effect on merchants | Swipe a fraudulent chip card you could have dipped → you may bear the loss | — |
| Stripe phase-out | Card networks are removing the magnetic stripe from cards in stages over the coming years | — |
| Net result | Swipe-only acceptance carries both liability and an expiry date | — |
Reader and acceptance types
When you choose an acceptance device, the goal is one reader that covers every card a customer might present:
| Acceptance method | How | Keep it? | |
|---|---|---|---|
| Chip insert (dip) | Card inserted, chip read | Yes — core EMV | — |
| Contactless (tap / NFC) | Card or phone tapped | Yes — fastest, expected | — |
| Magnetic stripe (swipe) | Legacy fallback | For now — for older cards | — |
| Mobile wallets | Phone/watch via NFC | Comes with contactless | — |
What to look for in an EMV/contactless reader
The four checks that decide whether a reader will actually work for you:
| Confirm | Why it matters | |
|---|---|---|
| Chip + contactless (NFC) | Accept both; swipe fallback for legacy cards | — |
| Processor / gateway certified | Must be certified for YOUR processor — the #1 gotcha | — |
| PCI / security compliant | Meets current PIN/security requirements | — |
| Connectivity to your POS | USB, serial, Ethernet or Bluetooth as your setup needs | — |
A migration plan
A clean migration path from swipe-only to chip + contactless:
- 1
Confirm processor support
Ask your processor/gateway which EMV+contactless devices are certified for your account, and whether your POS software supports them. This drives every later step. - 2
Choose the device
Pick a reader/terminal that accepts chip and contactless (and swipe fallback), is processor-certified, PCI-compliant, and connects to your POS the way you need. - 3
Install and connect
Connect the device to the POS, load any required driver/configuration, and complete the processor’s onboarding/activation for the new hardware. - 4
Test every method
Run test transactions for chip-insert, contactless tap, and swipe fallback, and confirm settlement with your processor before going live. - 5
Train staff and go live
Show staff to prompt “insert or tap,” handle declines, and use swipe only as a fallback. Then switch the lane over.
Browse card readers and related parts in our card readers & scanners category, plus terminal repair parts and POS terminals. If your current magnetic-stripe reader is simply failing (a separate issue from upgrading), see our MSR card reader troubleshooting guide; and to connect the new device, the interface & connectivity guide. Tell us your POS and processor and we’ll help match a compatible EMV/contactless device — confirm certification with your processor first.
Frequently Asked Questions
Why should a merchant still relying on swipe upgrade to EMV and contactless?
What exactly is the EMV 'liability shift'?
Is the magnetic stripe really going away?
What's the difference between chip-insert and contactless?
Do I need a whole new POS, or just a new reader?
What should I confirm before buying an EMV/contactless reader?
Sources & further reading
- EMV 101: Everything You Need to Know — CardConnect
- EMV Basics That Merchants Need to Know — Worldpay
- What Is EMV? A Guide to Chip & PIN Security for Merchants — Clover
- EMV Chips & the Liability Shift — Chargeback Gurus
- EMV and NFC: Enabling Secure Contactless Payments — EMV Connection
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