Boom in Contactless Payment Cards

Contactless payment card shipments are growing at the fastest rate since the technology was introduced in the early 2000s, according to figures issued by the Smart Payment Association (SPA) at the CARTES America conference, in its annual review of the smart payment card market.

The SPA said that the data highlights the growing enthusiasm of banks and payment providers in offering faster, more convenient ways to pay. Contactless technologies were present on 23% of all smart payment cards shipped in 2012 and Western Europe and Asia Pacific regions saw the largest increases in contactless shipments, with increases of 106% and 111% respectively compared with 2011.

Shipments of dual interface cards, incorporating both chip and PIN and contactless technologies, are now are growing at 77% year-on-year. The data collated by the SPA, whose six members represent more than 85% of the total available market, also show 9% growth in the total number of smart payment cards shipped in 2012.

More than 975m cards were shipped last year, with the biggest rise in the Asia Pacific region. China’s migration to chip-based payment cards heavily influenced the region’s 24% growth rate. Europe returned 8% growth, but the major trend in this mature market was the move to contactless. Contactless card shipments in North America only increased by 1% with Canada representing most of that increase, as the US continues the transition to Europay, MasterCard and Visa (EMV) into 2014.

The focus on increased card security continued through 2012, with 56% of global shipments featuring Dynamic Data Authentication (DDA) or Combined Data Authentication (CDA) mechanisms – up from 47% in 2011. With attempts to combat card fraud always high on the agenda and the increasing adoption of contactless payments, the move to DDA/CDA technology in the more mature markets is a significant step in increasing payment security.

Community of Independent States, Middle East and Africa (CISMEA) and Eastern Europe, the Americas and Asia Pacific registered increases of 69%, 60% and 45% respectively in DDA/CDA-enabled card shipments.

The SPA said that its review of the smart payment market also highlights the growing importance of inter-agency collaboration to deliver the necessary convergence of contactless standards to support and accelerate the adoption of near field communication (NFC) across markets. The SPA believes the harmonization of International Organisation for Standardisation (ISO), single euro payments area (SEPA) and EMVCo standards is critical to ensuring the global interoperability of new NFC contactless services for consumers.

“The data from this annual review points to a rapidly-changing payment marketplace,” said the SPA’s president, Andreas Strobel. “NFC contactless payment is becoming a priority, but without effective collaboration between global and regional standards bodies, the ability to deliver on consumer expectations will be constrained.

“SPA’s role is to help facilitate these discussions and support innovative new approaches to assure the industry is able to realise the tremendous opportunities that new technologies can bring.”

1 views

Related reading

Upward Trend
US securities and exchange
UAE flag
globo