Don’t get me wrong, I like the consumer experience of contactless cards. I like it even more than tapping my phone, but I am just not sure the U.S. market is ready right now to spend the resources to migrate their card portfolios to contact and contactless chips, particularly for debit cards. Although it was a topic of many conversations at conferences this Fall, I don’t believe there will be much debit issuance of contactless in 2019. Comments from CPI’s recent earning conference concurs that they are seeing only the beginnings of contactless activity. As reported in Digital Transactions:
Despite predictions of an upsurge in contactless payment cards, so-called tap-and-go cards have yet to generate much revenue for a major U.S.-based card manufacturer, CPI Card Group Inc.
Such cards are often called dual-interface cards because they support both contact EMV chip card transactions at point-of-sale terminals as well as contactless payments using near-field communication technology. The vast majority of current U.S. EMV credit and debit cards are of the contact-only variety, which is cheaper than dual-interface cards.
“For dual-interface EMV cards, we are seeing early signs of some transition to tap-and-go cards with our customer base in the overall market,” CPI president and chief executive Scott Scheirman said Wednesday morning as he reviewed the Littleton, Colo.-based company’s third-quarter financial results. “Dual interface is a small portion of our business today,” but he added that “we are optimistic about this opportunity” and promised a progress report in 2019.
Visa Inc. chief executive Alfred Kelly last month predicted Visa card issuers would be distributing more than 100 million contactless cards next year. Most U.S. POS terminals now support dual-interface cards, which facilitate faster transactions than contact-only EMV cards and have a large share of transactions in such countries as Australia, the United Kingdom, and Canada.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group