If you live in Chicago, you might be familiar with the Chicago Transit Authority’s Ventra card, supporting 1.6 million daily rides a around the Windy City and the greater Chicago metropolitan area. The Ventra card was one of the first payment cards in the US to implement a contactless EMV card, and you can see lots of people tapping to board the bus or train on their daily commute.
But if you don’t live in Chicago, it’s quite likely that you’ve never seen anyone pay with a contactless EMV card. You may have seen people tap and pay with an iPhone or Apple Watch – but never a card.
But that’s going to change. ABI Research forecasts that by 2021 half the EMV cards in the US will be contactless EMV cards. Citi was the first big issuer to deploy a large portfolio with their Costco Visa cards. The “me too” reaction to that move by other national banks is expected to pick up momentum in 2018 when many chip cards come up for renewal.
People often avoid trying out new technology when they’ve never seen it used before. Understandably, they lack the confidence to attempt something new, for fear of embarrassment or holding up the line at checkout. So we’ve prepared this video to illustrate what contactless payment looks like with debit cards, as well as credit cards for both low and high value transactions.
“Contactless is for Millennials” and Other Misconceptions
There are several misconceptions about contactless. For example, contactless is for young hip people, and not for the older generations. You might be thinking that if your clientele is mostly middle-aged or seniors, they wouldn’t want contactless cards.
But you would be surprised!
Since the US has been notoriously late to adopt EMV and contactless EMV, we actually have the benefit of a lot of data from other countries. And in the last year, in the United Kingdom, the highest increase in contactless card usage was by people over 60.
You might also think that the average cardholder cannot learn a new gesture, a new way to pay. But if there’s one thing we’ve seen since the launch of chip cards is that American cardholders do learn, and learn fast. After years of swiping, we’ve learned to insert our cards into chip readers instead. But more than that – while we might not even think about it – people use contactless every day. You tap your employee badge to access a building, tap a parking card to get into the garage, tap a fob to enter a gym, tap a phone to board a flight. Tapping is familiar and fast and already quite popular.
And finally, some people have heard rumors that contactless cards are not secure. Perhaps you’ve heard that fraudsters can use long-range RFID readers to extract personal data from cards, or use contactless skimming to create a counterfeit card. We debunk those myths in our Contactless Security Myth Busters White Paper, where we explain all the science and encryption at play. So you can set your mind at ease: contactless EMV cards are just as secure as any EMV chip card.
Why Spend More on a Contactless EMV Card?
Issuers may legitimately question whether they are prepared to spend more money on contactless EMV cards after just reissuing all cards as EMV after the migration in 2015. But contactless cards create three revenue accelerators that may just change your mind:
1. Increased spend: People with contactless cards make more transactions and spend more
2. Improved customer retention: Contactless cards gain top-of-wallet status and increase stickiness
3. Strengthened customer engagement: Contactless cards ease the transition to newer digital channels like mobile
And for those community financial institutions that still haven’t migrated to EMV, the choice to include contactless straight off the bat is a simple one. By providing an EMV card that combines security and convenience, you’re showing cardholders you care about both their security AND their time.
And one last point:
When you give a customer their new contactless card, you also have an opportunity to create additional value. As is the case with instant issuance, certain services create engagement opportunities between branch staff and your customers. If you seize that opportunity to teach your customers how to pay digitally with next generation cards and apps, how to log in to mobile or online banking, and how to keep their accounts secure, it strengthens the ties between you. And it gives you further opportunities to cross-sell other services.