Why is bypassing the PIN on a debit card something you can do? Doesn’t that defeat the purpose of having a PIN to begin with?
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In the US, the payments industry has established a “chip and choice” environment. For chip cards, the card issuer can choose whether their cards are PIN-preferring or or non-PIN-preferring (aka signature, although signature requirements have mostly been eliminated).
However, the U.S. Common AID for Debit is always PIN-preferring, which is why so many commenters are making the distinction between credit and debit, and of course older terminals that can’t handle chip are still common in the marketplace.
Anyway, at bypass-enabled (chip) terminals, the merchant, issuer and cardholder each may have a say in how a specific transaction is handled. The issue can set a preference for PIN or or non-PI, and associated floor limits and liability protections for a transaction depending on what verification methods are used (e.g., PIN or maybe a zip code at a gas terminal) or simply relying on the chip cryptogram. The merchant can set preferences at different floor limits than the issuer back could take on (or limit) liability exposure, or the merchant can defer to the cardholder for amounts below the floor limit.
Ultimately, there is a lot of flexibility in the system for issuers and merchants, with some flexibility even passed down to the cardholder. But don’t let any comment here that tries to explain liabilities in simple terms fool you. They are spewing outdated assumptions. Chip choice makes all of the liability shifting behind the scenes more complex and opaque to us customers. And rightly so, we just want to make our purchase quickly and go…and god-forbid we get stuck behind some dinosaur paying with cash, let alone some single-celled swamp-ooze writing up a check!
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