Contactless payment cards are being shipped at a faster rate than any time in the technology's decade-long history.
The ability to make contactless payments was on 23% of all payment cards shipped globally in 2012, according to the Smart Payment Association, which released these figures today during the Cartes America conference in Las Vegas. Last year, SPA delivered more than 220 million contactless cards.
"What banks are doing is using that card they're already putting in consumers' hands and giving them the opportunity to do contactless payments," says Brian Russell, an SPA representative. Russell is also the senior vice president of payment and transit at Giesecke & Devrient.
While traditional financial institutions have been worried about the influx of mobile payment startups seemingly disintermediating them from its customers, Russell says mobile payments can actually extend the bank's brand if consumers link bank cards to the applications.
The distribution of cards incorporating both EMV-chip and contactless technologies are growing at 77% year over year.
In countries that have switched to EMV chip-cards, contactless payments are more common, since the terminals that can read contact EMV-card payments can often read contactless payments as well.
Asia Pacific and Western Europe saw the largest increase in contactless card shipments. From 2011, Asia Pacific saw increase of 111% while Western Europe saw a 106% increase over the same time period.
According to SPA, North American contactless card shipment increased by only 1%, with most of the demand in Canada.
"There's been a maturation in the [U.S.] marketplace; in the U.S. we've seen a lot of momentum," Russell says. "It's been difficult to tweak the EMV standard in the U.S. … with issues being ironed out mostly around the Durbin Amendment."
The U.S. has been slow to adopt the EMV standard, but the card networks set a timeframe for most merchants to accept EMV cards by October, 2015.
This movement to more sophisticated payment technology shows banks are continually looking to improve security and "stay at least half a step ahead of fraudsters." Russell says. "Just because [chip] cards are deployed doesn't mean the market sits back and is static."