The use of chip-and-pin and smart “contactless” credit cards are proving popular in the U.S. where their spread has only just begun but represents a large part of the overall market.
According to a report from the Smart Payment Association, there was significant growth in the smart card market in 2014. In its most recent report, the SPA says cards with Dynamic Data Authentication (DDA) represented 70 percent of cards shipped globally in 2014 (up from 66 percent in 2013) and those with contactless technology represented 40 percent of payments cards (representing year-on-year growth of 35 percent globally). What makes these figures unique is that the move to chip-and-pin cards has only just begun in the U.S. – recently fueled by the executive order President Obama issued just last year – and that the growth shown in those figures above gather much of their muster from U.S. proliferation of chip-and-pin.
Sylvie Gibert, the president of the SPA, commented on the consumer demand for the new cards and banks' and retailers' responses to that demand.
“In 2014 we saw banks and retailers respond to consumer demands for faster and more convenient and more secure ways to pay as contactless shipments grew to their highest levels,” Gibert said. “Crucially, the continued and growing adoption of EMV-standard technology in the United States not only adds a greater security dimension, but offers contactless possibilities – both on the card and through embedded secure elements within NFC-enabled mobile devices.”
DDA, which is part of the Europay, MasterCard (News - Alert), and Visa (EMV) global standard for chip-and-pin cards, allows for authentication of individual cards to prevent cloning and data modification. Essentially, it helps keep consumer data safe from prying eyes. The so-called “tap and go” technology present in contactless cards allows consumers to use near field communication to place their cards on a card reader for a quick checkout.
Obama's executive order said the President intended to have the entire country using chip-and-pin cards by the latter months of 2015 and that the federal government, circa October 2014, would begin using that technology immediately. A push for rapid adoption on the executive level should reflect in further growth in the private sector where banks and retailers offer improved payment methods that can use the new cards to make checkouts easier and more secure.
Edited by Maurice Nagle
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