My understanding is that - The liability shift will pressure merchants just to use EMV-capable terminals. As long as they're using one they won't be penalized

My understanding is that - The liability shift will pressure merchants just to use EMV-capable terminals. As long as they're using one they won't be penalized for swiping. - However, the networks require certified EMV terminals to reject swipes from chip cards. (They can tell from the service code in the card's track data.) Unless dipping fails a certain number of times, in which case the terminal can allow swiping as a fallback. So merchants are incentivized to get an EMV-capable terminal, issuers are incentivized to replace magstripe cards with ICCs, and terminal requirements (mostly) prevent swiping ICCs.