About Smart Cards : Applications : Financial

Financial Applications

Smart Card Alliance Financial Resources

Contactless Credit and Debit Payment in the United States

Contactless payment has had the fastest deployment and acceptance of any emerging payments technology in recent memory and speaks of a unique market momentum for the industry. Since mid-2005, leading financial issuers have placed tens of millions of contactless credit and debit cards and devices into the hands of consumers worldwide. U.S. consumer research commissioned by the Smart Card Alliance in 2008 showed nine percent of the U.S. population now has a contactless credit or debit card. Issuers in the United States include: Advanta; American Express; Bank of America; Citibank; Citizens Financial; HSBC Bank; GE Consumer Finance; JPMorgan Chase; KeyBank; SunTrust; US Bank; and Wells Fargo. The payment brands, various issuers and different mobile operators have also launched proximity mobile payments pilots in a number of regions.

Merchant acceptance has also increased dramatically over the past 3 years. According to MasterCard, over 174,000 merchant locations worldwide now accept contactless payments, including quick service restaurants, convenience stores, pharmacies, theaters, sports venues, taxi cabs and transit operators. Both well-known national merchants (such as McDonald’s, 7-Eleven, AMC Theaters, Regal Theaters, CVS/pharmacy, Arby’s and Best Buy) and regional retailers (such as Wawa and Sheetz) have chosen to accept contactless payments.

Up-to-date information about contactless payment issuers, merchants accepting contactless payment and contactless payments news can be found on the Smart Card Alliance Contactless Payments Resources page.

EMV Credit and Debit Payment

Financial institutions in Europe, Latin America, Asia/Pacific and Canada are issuing contact or dual-interface EMV smart cards for credit and debit payment (commonly referred to as “chip and PIN”) or migrating to EMV issuance. According to EMVCo, worldwide EMV card deployment was 730 million cards as of first quarter of 2008, with 9.9 EMV point-of-sale terminals deployed.

EMVCo manages, maintains and enhances the EMV Integrated Circuit Card Specifications to ensure interoperability and acceptance of payment system integrated circuit cards on a worldwide basis. EMVCo is currently operated by JCB International, MasterCard International, and Visa International. EMV specifications were first issued in 1996 and has active working groups providing updates and revisions. In March 2006, EMVCo formed a new working group to define a common contactless application kernel and related type approval process for both cards and terminals, with initial specifications published in May 2008.

The following resources provide additional information on EMV and EMV migration.

Electronic Purse

Smart cards are used for electronic purse payment applications. In this application, the smart card carries a stored monetary value. Cardholders generally use these cards to replace cash in making frequent, low-value transactions. Electronic purses are used for both retail payment and transit fare payment. A few electronic purse implementations are listed below.

Payments Industry Resources
 

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