[ErrantX]

Yep you are completely correct; people don't realise how complex the chip is - it has what you'd legitimately recognise as an operating system! It can also be reprogrammed over the wire, if your chip and pin is taking a bit toooo long that might be what's happening.

Your correct on the risk spread. I wasn't confident last night (I'm not totally versed on the terminals) but looked it up. As I understand if you choose to accept offline only payments then you accept the risk of the transaction failing. If it's the issuers choice they own the risk.