Citigroup is doing away with its cobranded ExxonMobil MasterCard and on Aug. 31 will introduce a new private-label gas card whose name, the ExxonMobil Smart Card, could be a bit misleading to payments-industry insiders.

In payment industry jargon, "smart cards" are those containing computer chips to improve security over magnetic-stripe cards. The most common application of this in payment cards is the EMV standard, which is used in many countries.

But Citi's latest gas-rewards card is not EMV-compatible, Andrew Brent, a Citi spokesperson, said in an interview. The new magnetic-stripe card does feature ExxonMobil's Speedpass contactless payment functionality, introduced more than a decade ago.

The ExxonMobil Smart Card's basic benefits are leaner than those of the cobranded version, which Citi will shut down Oct. 31.

Citi's new private-label gas card enables cardholders to earn 6 cents per gallon on Exxon and Mobil fuel purchases, compared with the cobranded card, which allows customers to earn a 15-cent-per-gallon rebate.

Consumers must purchase at least 45 gallons of gas each month to qualify for the rebate, not to exceed 100 gallons a month, and the annual credit may not exceed $72, Citi said.

The ExxonMobil Smart Card can be used for convenience store purchases and car washes, but the rebate applies only to fuel purchases.

Citi's decision to phase out the cobranded card reflects its consumer research suggesting that customers "even when given the option of a higher value discount on a co-brand card, have overwhelmingly selected a private label credit card as their fuel card of choice," Brent said.

The move to a private-label card is "part of a larger trend in fuel credit cards" and the new card will reach "a much larger number of ExxonMobil customers," he added.

Citi is also offering a premium version of the new private-label card, the ExxonMobil Preferred Smart Card, which carries an annual fee of $29. Cardholders may receive 10% cash back on certain hotel and cruise line purchases, and 5% cash back on certain airline and car-rental purchases.

As for the other type of smart card, it is gaining momentum — U.S. card networks in recent months decreed that payment card issuers by October 2015 must adopt the EMV chip-card standard used around the world. Several issuers are already moving to adopt the standard in order to avoid absorbing liability for counterfeit card fraud that a chip could have prevented.

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