An Analyst’s Quest for a Dual-Interface Credit Card

by Michael Misasi 0

If you’re a baseball fan, you may have seenthe recent MasterCard commercial featured during the Major LeagueBaseball playoffs. You know-the one where the little kid in apirate costume defends his mom from the eye-patch wearing man? Andsince you are reading a payments industry blog, you might also havenoticed that the commercial was actually featuring a contactlessEMV transaction. The ad is interesting, I think, because only avery few products even support both contact and contactlessEMV.

I first saw the ad while I was in the middle of updating MercatorAdvisory Group’s assessment of EMV issuance, (The 3 Stages of EMV issuance: Entering Stage 2, aViewpoint released in October 2013), which encouraged me toformalize my search for dual-interface cards. Thus began myquest.

Let’s start with the cards that were in my wallet-a Bank AmericardCash Rewards card and a Blue Cash Everyday card from AmericanExpress. I had requested that Bank of America reissue my card oncebefore, realizing that my card supported EMV (the result of pastindustry research). The Amex card was issued with a contactlessexpresspay chip when I opened the account.

I checked the product pages of leading issuers’ websites and madenumerous customer service inquiries to confirm my findings.Chatting with a customer service rep from Bank of America, I wasinformed that my current card could support EMV and contactlesspayments, or what the industry refers to as dual interface. Ofcourse I asked the bank to send me a new card. But what arrived inthe mail a few days later took me by surprise. I received twoenvelopes. Envelope number one contained an EMV Cash Rewards cardidentical to the one I already had, with no additional contactlessfunction. Envelope number two contained a contactless RFID tag (byno means cutting-edge technology) and a letter explaining how tomake contactless payments. I could stick the tag onto my card togive it contactless capability, although the document from Bank ofAmerica advises against this practice. Disappointed, I brought myinquiry to American Express.

I was aware that Amex was reissuing some of its cards with EMVchips, so I called to see if my contactless Blue Cash card waseligible. I was expecting to hear that EMV was available only onPlatinum cards or other annual fee products, but this was not thecase. I hung up and awaited my new contact EMV card. When itarrived, however, I found that upgrading my card had cost me mycontactless capability. It turns out that choosing contact andcontactless EMV is an either/or decision.

Issuers’ decision not to offer dual-interface cards is not thatsurprising. These chips are more expensive than contact-only EMVchips, which many issuers believe are too expensive to issue bythemselves. Moreover, I would expect an issuer to market thecapabilities of dual-interface cards if they were actuallyavailable. Many questions still surround issuers’ readiness for thecard networks’ EMV liability shifts, but a consensus seems to beforming that the time for dual-interface cards has not yet arrived.Perhaps issuers are more willing to commit resources to promotecontactless payments with their mobile wallet initiatives than withplastic cards.

To find out which products do support contact and contactless EMVchips, please read the previously mentioned Mercator Advisory GroupViewpoint. It also provides a complete assessment of EMV issuanceincluding an estimate of the percentage of U.S. consumer creditcards that have a chip and a comparison of leading issuers’ EMVissuance progress.

Follow Michael Misasi on Twitter @mikemisasi.