About Smart Cards : Applications : Financial

Financial Applications

Smart Card Alliance Financial Resources

Contactless Credit and Debit Payment in the United States

Since mid-2005, leading financial issuers have put millions contactless credit and debit cards and devices into the hands of U.S. consumers. Issuers in the United States include: Advanta; American Express; Citibank; Citizens Financial; HSBC Bank; GE Consumer Finance; JPMorgan Chase; KeyBank; MBNA; Peoples Bank of Paris, Texas; and Wells Fargo. Visa and JPMorgan Chase have also launched a contactless mobile payment pilot in Atlanta, and Discover has announced that it will pilot contactless payments using mobile phones later this year. In addition, Peoples Trust Bank and Mint Technology in Canada are issuing contactless prepaid cards based on MasterCard PayPass technology.

Introduction of contactless credit and debit cards has focused on markets that have lower value transactions (less than $25), where consumers use cash for payment, and where transaction speed and customer convenience are critical. Merchant locations throughout the U.S are now accepting contactless payment, including quick service restaurants, convenience stores, pharmacies, theaters, and sports venues, among others. Both well-known national merchants (such as McDonald’s, 7-Eleven, AMC Theaters, Regal Theaters, CVS/pharmacy and Arby’s) and regional retailers (such as Wawa and Sheetz) have chosen to accept contactless payments.

Up-to-date information about contactless payment issuers, merchants accepting contactless payment and contactless payments news can be found on the Smart Card Alliance Contactless Payments Resources page.

EMV Credit and Debit Payment

Financial institutions in Europe, Latin America, Asia/Pacific and Canada are issuing contact EMV smart cards for credit and debit payment or migrating to EMV issuance. According to EMVCo, worldwide EMV card deployment was 405.8 million cards as of end of December 2005, while EMV terminal deployment was 4.5 million units.

EMVCo manages, maintains and enhances the EMV Integrated Circuit Card Specifications to ensure interoperability and acceptance of payment system integrated circuit cards on a worldwide basis. EMVCo is currently operated by JCB International, MasterCard International, and Visa International. In March 2006, EMVCo formed a new working group to define a common contactless application kernel and related type approval process for both cards and terminals.

Electronic Purse

Smart cards are used for electronic purse payment applications. In this application, the smart card carries a stored monetary value. Cardholders generally use these cards to replace cash in making frequent, low-value transactions. Electronic purses are used for both retail payment and transit fare payment. A few electronic purse implementations are listed below.

Payments Industry Resources