About Smart Cards : Applications : Financial

Financial Applications

Smart Card Alliance Financial Resources

Contactless Payments

EMV

Mobile Payments and NFC

Transit Payment

Other

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. 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 Near Field Communication (NFC)-enabled mobile contactless payments pilots in a number of regions.

Merchant acceptance has also increased dramatically over the past 3 years. According to MasterCard, over 311,000 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 payments 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, Canada and the United States 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, over 1.5 billion EMV cards have been issued globally and over 21.6 million POS terminals accept EMV cards as of Q2 2011. This represents 44.1% of the total payment cards in circulation and 72.0% of the POS terminals installed globally, excluding the United States.

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 owned and managed by American Express, JCB, MasterCard, and Visa. 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. EMVCo has been active in defining the architecture, specifications, requirements and type approval processes for supporting EMV mobile contactless payments.

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

NFC Mobile Contactless Payment

Mobile phone users are already familiar with using their phones to pay for products such as games, ring tones and other digital content. Mobile phones and other mobile devices are also being used to pay for products at a physical point of sale (POS), due to the increasing availability of new, more capable mobile devices and new payment technologies that make such transactions possible.

While various mobile payment models have been piloted, the financial industry launch of contactless credit and debit cards based on the ISO/IEC 14443 standard and the emergence of ISO/IEC 18092 (Near Field Communication (NFC)) that is compatible with ISO/IEC 14443 provide opportunities for the mobile telecommunications industry to incorporate NFC technology in handsets and enable mobile contactless payments at existing merchants who accept American Express, Discover, MasterCard and Visa contactless credit and debit cards.

Up-to-date information about NFC-enabled mobile contactless payment can be found on the Smart Card Alliance NFC Resources page.

Additional information about NFC can be found at the NFC Forum web site.

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