What is a financial IC card downgrade transaction:

The so-called financial IC card downgrade transaction refers to a financial IC composite with both a magnetic stripe and a chip on a terminal that already has a chip acceptance function. Instead of inserting or swiping the card for transactions, the card uses a less secure magnetic strip for transactions. This is mainly because cashiers have long developed the habit of swiping magnetic stripe cards to accept financial IC cards. On terminals that already have chip acceptance functions, cashiers still accept financial IC cards by swiping magnetic stripe cards. This operation reduces the security of financial IC card transactions and is called a downgrade transaction in the industry.

What are the benefits of downgrading transactions:

Lowering the credit rating can effectively protect the financial security of financial IC card holders. The track information of financial IC cards originally issued in ATM and POS transactions is skimmed, and there is a risk of copying counterfeit cards and stealing the cardholder's funds. Because financial IC card magnetic stripe transactions are conducted on terminals with chip reception capabilities, it can effectively prevent counterfeit card fraud that may occur with the magnetic stripe of financial IC cards. It can be said that financial IC cards "do not leave the card without leaving the money." Stealing will no longer happen.

The extensive adoption of risk transfer rules and irregular operations will lead to the risk of counterfeit financial IC cards, resulting in losses for acquiring merchants. After the cancellation of downgrade transactions is implemented, the way cashiers accept financial IC cards will be further standardized, and awareness of chip acceptance will be improved, which can reduce the losses caused by counterfeit card fraud to acquiring merchants.