About Smart Cards : Applications : Financial

Financial Applications

Secure Technology Alliance Financial Resources


Contactless Payments

Mobile Payments and NFC

Transit Payment


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 4.0 billion EMV cards were in circulation at the end of 2015 and 42.4% of all card-present transactions undertaken globally between June 2015 and June 2016 used EMV chip technology.

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, owned and managed by American Express, China UnionPay, Discover Financial Services, JCB, MasterCard, and Visa, maintains and enhances the EMV specifications and associated approval procedures, to ensure global interoperability of chip-based payment cards with acceptance devices including point of sale terminals and ATMs. EMVCo also develops and manages new functionality required by the market (e.g., contactless, mobile, tokenization and 3D Secure).

The U.S. is now migrating to EMV chip cards. The U.S. Payments Forum is the cross-industry organization focused to address issues that require broad cooperation and coordination across many constituents in the payments space in order to successfully introduce secure EMV contact and contactless technology in the United States.  As of the end of 2016, the Forum estimates that over 600 million EMV chip cards have been issued in the U.S., with 1.7 million merchant locations accepting EMV chip transactions.

The Forum has published a variety of resources to assist payments industry stakeholders with EMV migration; resources are available on the EMV Connection web site.

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

Contactless Credit and Debit Payment in the United States

Contactless payments are simply payment transactions that require no physical contact between the consumer payment device and the physical point-of-sale (POS) terminal.  In a contactless payment transaction, the consumer holds the contactless card or device in close proximity (less than 2-4 inches) to the merchant POS terminal and the payment account information is communicated wirelessly (via radio frequency (RF)).

Contactless payments are currently supported by multiple card issuers and financial service providers.  American Express, Discover Network, MasterCard, and Visa all have contactless payment products (ExpressPay from American Express®, Discover® Network D-PAS Contactless, MasterCard® PayPass™ and Visa payWave™, respectively).  These products rely on ISO/IEC 14443-based technology, ensuring payment solution compatibility regardless of brand or payment device when used with contactless readers that have been approved by the payment brands.

The initial introduction of contactless financial payment devices focused on markets that had lower value transactions (less than $25), where consumers used cash for payment, and where transaction speed and customer convenience were critical.  Contactless payments made quick progress in many merchant segments including quick service restaurants, convenience stores, pharmacies, theaters, and sports venues.  Contactless payments have expanded beyond these initial merchant segments, however, moving into other traditional retail segments (e.g., office supplies, specialty retailers, grocery stores), and opening up credit card acceptance in new merchant categories (e.g., taxis, vending machines, transit fare payment).

Additional information about contactless payments can be found on the Secure Technology Alliance Contactless Payments Resources page.

Contactless Payment with NFC-Enabled Mobile Devices

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 have provided 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 Secure Technology 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