Are merchants required to switch to chip-enabled terminals?

No, it’s not a requirement but it could be costly if they don’t. That’s because of the liability shift. If a merchant has not converted its payment devices to chip-enabled technology by October 2015 the merchant could be held liable for the costs of a fraudulent transaction if the person paying at the terminal has a chip card but has to swipe the magnetic stripe on the back of the card through an older terminal.