U.K. Contactless Payments Triple; Amex Rolls out Contactless EMV Cards in U.S. (Feb. 9, 2015)
Contactless payments surged in popularity in the U.K. within the past year, with contactless card spending volume tripling to £2.32 billion (US$3.53 billion) from £653.4 million in 2013, while total contactless transactions rose more than 200 percent to 319.2 million in 2014 from 100.4 million a year earlier, the UK Cards Association announced last week. One factor behind the surge: Transport for London in September 2014 enabled contactless payment for all journeys on its trains and buses, according to the association. No PIN is required for transactions up to £20 (US$30), and the average U.K. contactless payment is £8.26. There are 58 million contactless cards in circulation in the U.K.; 64 percent are debit and 36 percent are credit or charge cards. Fraud associated with contactless cards remains low, accounting for 0.007 percent of all contactless card spending, the association said.
The U.S. may soon see incremental gains in contactless card payments, too, as American Express rolls out contactless EMV credit cards to some customers. American Express recently began issuing “dual interface” EMV cards that can be processed as a contact chip transaction, contactless or magnetic stripe, depending on the merchant’s POS setup, Karen Czack, the company’s vice president, global chip products, said last week at the Smart Card Alliance’s Payments Summit in Salt Lake City. American Express, which issues EMV cards around the world, last year began rolling them out in the U.S.
American Express was among the first U.S. issuers to experiment with contactless cards in 2005, but consumer usage remained low because relatively few merchants’ POS terminals were contactless-enabled then, according to Czack. But that’s changing with the U.S. migration to EMV cards and the rise of contactless mobile payments. “We’re committed to contactless payment, which is convenient and secure . . . Many more merchants are enabling [contactless] with the move to EMV, and there’s much more interest from merchants, spurred by Apple Pay,” Czack said. She did not disclose what percentage of all the payment network’s cards will have contactless capabilities.
Other issuers may soon follow suit in adding contactless capabilities to EMV cards as they replace and reissue cards in the U.S., Rick Oglesby, a senior analyst with Double Diamond Group, tells Paybefore. “As more merchants enable NFC for Apple Pay, it also means contactless cards can be accepted at the POS. For banks supporting Apple Pay, it makes a lot of sense to add contactless technology on their cards, because they wouldn’t want Apple Pay to be their only contactless option,” he notes.
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