I'm pretty sure the article has it completely backwards. If a retailer has a chip reading terminal, they aren't responsible for fraud. It incentivizes retailers to update their hardware, or face shouldering the fraud risk for chip enabled cards that they end up swiping.
Agreed. The simplest way I've heard it described is that whoever has the lowest level of EMV support is liable. So if the bank hasn't issued you a chip card, but the retailer supports it, the bank is liable. Likewise, if you have a chip card, but the retailer doesn't have the EMV readers, the retailer is now liable -- and that is where the change is.
You're correct. If the merchant has the EMV reader but the bank card only has a mag stripe the bank eats any fraud, period. The merchant is completely off the hook.
What happens if the reader is an EMV one but the fake bank card looks like it has a chip and it was swiped instead of using the chip? I have a debit card with the chip but I can still swipe it at the hybrid terminals. Who owns liability in that case?
Once I used my chip cards in a reader in the US, and was told, "this is a chip card, please insert it into the bottom" so there's definitely a bit that can be set in the magstripe to tell the PoS that a chip should be available in case you clone just the magstripe.
