​​​​​​​Contactless is coming – 2019 to see acceleration of payment innovation to further eliminate friction

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​​​​​​​Contactless is coming – 2019 to see acceleration of payment innovation to further eliminate friction

By Mike Troy - 12/17/2018
Contactless payments are expected to become more widespread in 2019. Many retailers who upgraded technology to accept chip cards can already accept contactless cards.

Chip-enabled credit card readers are available in nearly all retailers and chip cards accounted for 60% of all transaction volume last year, according to the U.S. Payments Forum, a cross-industry group focused on payment issues. The next big advance in credit card payments promises to be contactless cards where the good news is many retailers already have the hardware in place to accept contactless, according to Randy Vanderhoof, director of the U.S. Payments Forum. Already more than 50 percent of transactions are taking place at contactless payment-enabled merchants who gain that capability when they upgraded systems to accept chip cards.

That doesn’t mean 2019 will see a massive shift to contactless, which is the preferred payment method in Europe, but Vanderhoof expects a transition is coming.

“Unlike other countries that moved swiftly to contactless payments, we won’t have a ‘year of the contactless payment.’ Instead, the payments industry will focus on giving consumers the choice to use contactless where speed and convenience is highly valued, and as a result of that, contactless and mobile transaction volumes will grow over time,” Vanderhoof said. “We’re seeing steady upticks in contactless and mobile wallet transaction volumes, but most card issuers and merchants are evaluating the business case and planning for next year.”

Vanderhoof contends, based on feedback from the Payment Forum’s extensive member base, that 2019 will be a year dual-interface cards hit the market and more merchants become enabled to accept them.

“It’s likely we’ll see this happen most in metropolitan areas with larger transit systems, as they are migrating to EMV contactless at the same time,” Vanderhoof said.

The U.S. Payments Forum resulted from the expansion of the charter and activities of the EMV Migration Forum, which was formed by the Smart Card Alliance in 2012 to support the industry cooperation and alignment of the move from magnetic stripe technology to EMV contact and contactless technology. The transition of the organization to the U.S. Payment Forum took place in August 2016. Members include global payments networks, financial institutions, merchants, processors, acquirers, domestic debit networks, industry associations and suppliers.