Chase, once a contactless pioneer, commits again to NFC issuance
JPMorgan Chase & Co. has committed to roll out contactless chip cards for all new and replacement payment cards, which will likely spark a mass movement, if the experience of other global markets is any guide.
The move harkens to a time when Chase was the poster child for contactless payments. The company aggressively marketed its "blink" contactless payment cards for many years before finally removing that brand — and the underlying technology — in late 2011.
Chase will issue all Visa credit cards henceforth with contactless payment functionality, with the goal of converting its entire portfolio, including cobranded credit cards, to dual-interface technology by the first half of next year, the bank said in a Wednesday press release.
Beginning in the second half of 2019, Chase will roll out all new Visa debit cards with the same capability, which enables users to tap to pay at Near Field Communication-equipped payment terminals or pay using the contact chip, Chase said in the release.
Visa, which has been pushing contactless technology with issuers, expects about 100 million U.S. Visa cards will be contactless by the end of next year, according to the release.
The move could help increase transaction volume, as it has in other countries, where more than 40 percent of all transactions at the point of sale are contactless, said Abeer Bhatia, Chase Card Services' president of card marketing, pricing and innovation, in the release.
Broad U.S. issuer adoption of contactless cards coincides with a movement among several large domestic transit agencies to begin supporting contactless payments, which could be a boon to overall usage.
“Outside the U.S., consumers love the convenience of contactless payments, and we’re excited to start tapping to pay here,” Bhatia said in the release.
The U.S. has lagged behind global markets in adopting contactless because of its late migration to chip technology beginning with the October 2015 liability shift, and the lack of a critical mass of merchants supporting NFC.
In recent months, however, key U.S. merchants including CVS, 7-Eleven and Costco have switched on contactless acceptance at terminals, which has helped ignite more issuer interest in going contactless.
Capital One is issuing all of its Savor rewards cards with contactless technology, as are a handful of credit unions, experts say.
“Large and small credit unions tell us they’re planning to go contactless with cards in 2019, and this is probably going to catch on much faster than the efforts to get mobile payments going a few years ago,” said Chuck Fagan, president and CEO of PSCU, which provides card services to 900 credit unions, in an interview. “More merchants are ready now and the timing is good,” he said.
Since most issuers in Australia switched card portfolios to contactless, more than 90 percent of transactions are conducted via tap, and more than half of transactions in the U.K. occur contactlessly, Visa noted in the release.