Tap and Go: How Contactless Cards Could be Shaping the Future

Posted by Keri Crane

Wed, Jan 30, 2019 @ 11:00 AM


Next-generation contactless cards are getting a lot of press these days. Contactless cards were unsuccessfully attempted years ago, but there are several reasons to believe that they will be a success over the coming years – from merchant and issuer adoption to increased security and quicker transaction times.

Merchant Adoption

Having contactless-capable terminals in place makes a huge difference in enticing financial institutions to invest in new cards. According to Visa, 79% of quick-serve restaurants, 77% of drugstores, and 61% of food and grocery stores have the ability to accept a contactless transaction. Generally speaking, if a merchant accepts “the Pays” like Apple Pay, Google Pay, and Samsung Pay, they can support contactless card payments.

Modernization of Metropolitan Transit Systems

In May of 2019, New York, which has one of the world’s largest transit systems, will begin overhauling their subway, train, and bus systems to support payments with open loop contactless credit and debit cards. Over time, this will eliminate the need for closed loop MetroCards, ticket purchases, or counting coins for the bus. Commuters will simply tap their contactless card or smartphone at the turnstile. In addition, Chicago has already deployed open contactless, and other major cities like Boston and Philadelphia have upgrade plans in progress. As evidence, Mastercard and Visa case studies illustrate the quantifiable success of contactless pay-as-you-go technology powering Transport for London (TFL). Across the globe, in cities where commuters are using contactless cards for rapid transit, there’s a halo effect that translates to tapping for coffee, for lunch, and so on; making the card top-of-wallet like never before.


Tapping is faster than inserting or swiping. A contactless card transaction takes less than a second. There’s no behavioral change, like pulling out your smartphone. It’s still the use of a payment card and just a matter of changing the interaction with the terminal. According to A.T. Kearney, in other countries where contactless cards and mobile wallets were introduced in a similar timeframe, contactless cards experienced much higher penetration at the point-of-sale than mobile wallets. In addition, the recent global card brand rule changes eliminating the need for merchants to capture cardholder signatures lends itself well to contactless purchases.


Card-present counterfeit fraud is down 80%. A dual interface chip card is a credit or debit payment card that includes an embedded chip for contact transactions and an antenna for contactless transactions. In both cases, dynamic EMV technology is used. The cards are described as “next-generation” because they support increased security whether a cardholder is tapping the terminal for contactless or inserting into the terminal for contact purchases. In addition, the magnetic stripe is still present on a dual interface chip card for swiping when the terminal fails to support the more secure transaction methods.

Issuer Adoption 

Capital One and Citi have added contactless technology to select credit card programs. Chase announced last November that they will support contactless on all-new and reissued credit and debit cards by the end of 2019. A.T. Kearney forecasts that by early 2020, all top 10 banks will have launched contactless card programs. By the end of 2022, it is estimated that 56% of all cards in force will be contactless.

JHA Card Processing Solutions™ is preparing to pilot dual interface chip cards in the latter half of 2019.

Topics: banking, cards, credit cards, contactless

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