JPMorgan Chase heavily markets its Sapphire Preferred card to travelers, but without an EMV chip, the Sapphire card was losing its luster for some users.

"Given the shopping and spending patterns of our customers, if we didn't have this [EMV] functionality in place, we would potentially be losing sales," says Jennifer Roberts, president of Chase Card Services.

JPMorgan Chase is adding EMV chip-and-signature capability to its Sapphire Preferred Visa cards, bolstering the product's branding for travelers and appeasing cardholders who have experienced difficulties using traditional magnetic stripe cards overseas, she says.

"The Sapphire Preferred customer definitely has more travel transactions and more dining transactions than the rest of the customer base," she says, adding later, "To the extent that those customers are some of our more valuable customers — higher spending, et cetera — we want to really make sure they don’t have any kind of disruption."

Chase already tailors the card to international travelers by not charging foreign transaction fees and offering other promotions, but consumers have complained to the bank about disruption at the point of sale when traveling, particularly at unmanned terminals that only accept EMV-chip cards.

The EMV cards also have magnetic stripes and will be automatically issued to new cardholders who apply for the Sapphire Preferred card at retail branches beginning Nov. 17 and online beginning Nov. 18. Existing cardholders can also request the new cards. Consumers pay an annual fee for the "Preferred" version of the Sapphire card, and receive additional reward points for travel purchases and pay fewer points to redeem points for travel rewards.

"Given the fact that we're providing incentives to use the card for travel…we wanted to make sure that this card was the card that people wanted to take with them when they traveled as well, not just to get points for travel and not just to redeem for travel," Roberts says.

Chase first began issuing EMV-chip cards to U.S. customers in mid-2011 on its JPMorgan Palladium card, which is also designed for international travelers who are customers of its private bank. Chase was among the first to offer chip-and-signature cards in the U.S. instead of the chip-and-PIN standard prevalent in other countries.

Chase also offers EMV-chip cards for its British Airways, Hyatt and Marriott-branded affinity products, along with the private bank's JPMorgan Select card.

The EMV cards cost more to produce — especially since the Sapphire Preferred card is constructed from plastic with a metal inlay for aesthetic appeal and the extra "plunk" factor — but they help keep it the top-of-wallet card for consumers, Roberts says.

"There's a revenue opportunity in terms of retention of sales, retention of customer and really from a defensive perspective, preventing them from having a reason to go take a card with someone else," she says.

In addition, Chase's portfolio of EMV cards offers preliminary insight into the fraud trends it can expect to see from more widespread EMV adoption.

"We want to make sure that as we deploy a larger number of EMV cards into the marketplace, that we see a reduction in fraud because that's one of the key benefits," Roberts says.

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