Contactless payments offer the same strong security as EMV cards but how do they stack up against the needs of consumers who are now dealing with the aftermath of COVID-19? Jaime Topolski, the director of payment card products at Fiserv gives his insight on contactless cards.
While many Americans were still growing accustomed to inserting their EMV chip cards into the reader, contactless payments had already taken hold globally. Slowly but surely however, leading U.S. financial institutions began pushing ahead with contactless cards, recognizing the benefits that this payment method, tapping a payment card on the point-of-sale terminal rather than inserting it, presents to consumers.
Although EMV cards offer increased security, they also slow transaction times. Contactless transactions are faster, and customers can return their cards to their wallets or purses without waiting for a transaction to be completed. They also offer the same strong security as EMV cards and are ideal for when people are quickly on the move, such as through transit turnstiles.
Suddenly, another consideration that was not even a factor at the end of 2019 became arguably the most important deliberation of all: consumers’ physical safety when carrying out a transaction. Enabling contactless payments became a clear way for businesses to communicate that they are taking steps to ensure the safety of consumers and employees during the ongoing COVID-19 pandemic.
The World Health Organization earlier this year urged the usage of contactless payment technology where possible to minimize the risk of spreading infection, and Fiserv consumer finance surveyconducted in May of this year found that consumers consider contactless payments safest in preventing the spread of the virus.
Most first-generation EMV chip cards have begun to expire in 2020, making this an ideal time to launch a contactless card program as part of the natural reissuance cycle. If inventory of contact-only EMV plastics is running low it may make sense to fast-track the migration to contactless.
There may also be considerations that require a mass or accelerated reissuance such as a change between card networks, a merger or acquisition, or a rebranding.Unlike with the advent of EMV, numerous branding, personalization and design options now exist with contactless cards; where previously it was a case of simply embossing the cardholder name on the front of the card, the ability now exists to print this information on the back of the card, leaving considerably more room for the branding and design of the card to make it stand out in a crowded wallet.
Before launching a contactless cards program, a critically important consideration is both cardholder and employee education and communication around the switch to contactless. When the move was made from magnetic strip to EMV cards, there was a considerable amount of cardholder education required but contactless involves significantly less ramp-up. Nevertheless, cardholders need to understand how to successfully complete a contactless transaction, types of merchants where contactless transactions are supported, as well as continued emphasis on security and safety. This information can be included on the card carrier, an insert, in telephone greetings or online.
In terms of employees, they need to be prepared to answer questions from cardholders around contactless payments as they may have misconceptions, for example, around a criminal’s ability to steal information remotely from the card. You can allay their fears, as such theft of information is not possible.
For banks and credit unions that issue payment cards in their branches, their card printers are likely already able to support contactless cards. There may, however, be required upgrades in order to support the additional keys needed for contactless cards, as well as the software that drives the printers and the profiles that are used to personalize the cards.
The overall benefits of contactless cards include the fact that consumers are getting the best of both worlds in terms of combining the superior security of EMV with the speed and convenience of the old magnetic stripe cards. It also presents a golden opportunity to engage with cardholders to secure top-of-wallet positioning for cards as the cardholder experience is notably improved – those additional seconds required for an EMV transaction versus a contactless transaction seem like an eternity once a consumer is acclimatized to paying with a contactless card. It will also generate incremental revenue as customers use their cards more regularly for day-to-day small-dollar transactions; particularly as contactless payments are perceived as fast as cash payments.
Even as the pandemic hopefully continues to recede and life returns to some semblance of normalcy, faster, more convenient checkout experiences will dictate consumer behaviors and they are unlikely to wish to revert to old ways of conducting transactions when tap-and-go is convenient, secure and innovative, and can be used anywhere conventional cards are accepted.