The payment world has been shaken up by recent decisions from Mastercard and Visa that sets much of the globe on a hard deadline to adopt dual interface cards. Both leading global payment companies have set tight timelines requiring businesses to begin implementing the technology immediately with rollout complete by early next decade.
As of next April, Mastercard requires new cards to be dual interface (DI) for much of the world. Visa has an even more fast track timetable that sets October 2018 as the date for all new cards in Asia-Pacific and Latin America. From October 2018, most newly deployed terminals worldwide must support contactless and NFC-enabled mobile payments for MasterCard and Maestro with a final date set for April 2023 for all terminals.
“It acknowledges reality,” says Mikko Kähkönen, Head of Product Management Payment at G+D Mobile Security. “Contactless payments have been growing dramatically in recent years and this is the next logical step in the development of DI cards.”
As examples, he points to China, where 90% of all issued cards are now contactless, while more than 70% of point-of-sales terminals in Poland and Spain are contactless enabled. In places like Australia, Canada, and Singapore, contactless is the norm in retail payments.
Secure and contactless
The growth in contactless payments is being driven by convenience and security. Shopping is quicker and easier when just tapping your card at a checkout, allowing for a better customer experience. The transaction duration with DI cards is approaching 200 milliseconds, which is why merchants love them as they help keep queues to a minimum.
Simultaneously, cards are equipped with state-of-the-art security features. When a payment is made with an DI card, the microprocessor chip creates a unique transaction code that cannot be reused and can only be verified by the card issuer.
Additional security comes from the card authenticating itself to the terminal based on public key infrastructure. This makes counterfeiting so much harder and the challenge to fraudsters difficult to the point of being impossible. To deter lost and stolen fraud, cards are able to track spend and ask for PIN entry on a regular basis. Security can be further enhanced with features such as biometric cardholder verification, making life even harder for fraudsters.
The decision by the two payment companies will be transformative in terms of the continued growth of contactless payments. As the changes are mandatory, banks will need to react.
“Most have been moving in this direction as DI chip cards are already well on their way to become the standard in various parts of the world,” notes Kähkönen. “And you can now expect a greater swing towards the technology among the issuers with contactless cards becoming almost universal.”
Kähkönen says that the business case for issuers is about the return-on-investment in converting cash to card-based transactions. In Europe, for example, transactions made using Visa cards per month rose by 18% after the introduction of Visa Contactless.
DI chip cards are already well on their way to become the standard in various parts of the world.
Flow on effects
With DI cards becoming mandatory, Kähkönen expects more consumers to take up contactless payment even for small purchases, such as for transit tickets. In the US, where there is increasing interest in contactless payments, several mass transit systems – Chicago Transit Authority, Utah Transit Authority and bus systems in New York, Philadelphia, and Boston – are converting their closed-loop systems to open loop that allows contactless payments via cards like Mastercard or Visa. Such developments will not only further displace cash but stimulate further transactions. For banks, the issue will be getting the right cards in the end customers hand at the right time.
Number one in DI Chips
Anyone who pays by cash, card or smartphone anywhere around the world is likely to be using technologies from G+D. The company is considered number one when it comes to DI Chips Cards and many issuers consider G+D to be the partner of choice in the payment ecosystem.
Kähkönen believes the company is well poised to assist banks make the transition to DI, or to assist banks to develop their current offering, based on their strong record of assisting issuers.
“Apart from the exceptional levels of reliability of our cards, G+D is also a leading expert in security, so our solutions always feature the latest measures,” says Kähkönen. “Plus, we offer further enhancements such as cards supporting biometrics or dynamic security code for e-commerce.”
G+D supports all global payment brands, as well as local debit cards with a wide portfolio of contactless cards that can be used for identification, authentication, and data storage. The 2018 product generation offers all this, as well as a wide and attractive portfolio of different card bodies allows the issuer to stand out from the crowd by enhancing and differentiating their cards to build trust and loyalty and add brand engagement.
These can be highly personalized, such as in the form of metal cards, 3D printed cards, cards with metal effect or environmental non-plastic cards. G+D also offers add-ons available in many different form factors, such as stickers and wearables . This can help push banks even more to the centre of the customer experience enabling them to serve, nurture, and manage their customers in a secure way.
More information on dual interface technology can be found here.
The transaction duration with DI cards is approaching200