> Last time I tried swiping my card — and that was ages ago — the terminal displayed something to the effect of "this card has a chip, please insert the chip".
I think it's configurable depending on merchant risk tolerance. I've seen cases where the terminal lets you swipe after three failed chip reads, for example.
Almost every terminal will fall back to mag-swipe if the chip fails to read 3 times. I had an Amex with a faulty chip and had to do this every time. Terminal (every single one) would refuse to allow me to pay with a swipe initially, insisting on chip -- but once the chip failed 3 times, they'd all happily take the swipe.
The terminal may try, but in Europe since about a decade ago most card issuers will reject stripe transactions on a terminal with a chip reader when the card also has a chip, to prevent downgrade attacks.
I think it's configurable depending on merchant risk tolerance. I've seen cases where the terminal lets you swipe after three failed chip reads, for example.