Contactless cards get crucial boost as Chase embraces tap-and-pay
Other major issuers may jump on the bandwagon and update their cards
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If you prefer paying for your purchases as quickly as possible, you could soon have a much easier time zipping through the checkout line.
Instead of swiping or dipping your credit card into an EMV-enabled reader, you’ll be able to quickly tap your card onto a contactless card reader and waive au revoir to the cashier in just a fraction of the time it typically takes to pay via credit card.
In a pioneering – and potentially ground-shifting – move, Chase announced Nov. 14 it’s preparing to roll out contactless technology on all newly issued and renewed Chase Visa cards. Popular cards such as the Chase Sapphire Reserve and Chase Freedom will feature the technology by summer 2019. Meanwhile, Chase debit cards will also be granted tap and go abilities sometime before 2020.
“Tapping to pay will help speed our customers through checkout,” said Chase’s Abeer Bhatia in a news release. “Outside the U.S., consumers love the convenience of payments and we’re excited to start tapping to pay here.”
U.S. finally catching up on contactless payments
Popular in Canada and abroad, contactless payments typically take much less time to process than chip-based payments.
Visa estimates a contactless payment can potentially be completed within half a second if a retailer doesn’t require a signature or PIN. An EMV payment, by contrast, can take as long as three and a half to 10 seconds or more, depending on the reader. Square made waves earlier this fall when it whittled down EMV processing times to two seconds.
Many U.S. cardholders have become used to contactless payments through their mobile phones. But until now, plastic cards with tap-and-go technology have been relatively rare.
Some issuers, such as Capital One and Citi, have added contactless technology to select cards. The Capital One Quicksilver Cash Rewards Credit Card, the Capital One Venture Rewards Credit Card and the Capital One Savor Cash Rewards Credit Card can all be tapped on a contactless card reader. So can the Costco Anywhere Visa card by Citi.
Capital One is even running a promotion right now that awards select cardholders up to $30 in exchange for tapping their cards to pay, according to multiple reports.
However, Chase is the first major issuer to add contactless technology to the majority of its cards. Most Chase credit cards are Visa cards.
More issuers could soon jump on the contactless bandwagon
Chase’s surprise announcement has quickly led to speculation that other card issuers will soon jump on the bandwagon and upgrade their cards with contactless technology.
Nearly two months before Chase made its announcement, Aite Group analyst Thad Peterson told Digital Transactions it would take just one major issuer adopting contactless cards to help move the needle and inspire more issuers to do the same.
“Once a major issuer distributes the cards to a significant population, usage of contactless will become increasingly visible and that may drive consumer demand,” he said.
Earlier this year, Visa hinted it was already working with a number of issuers – not just Chase – to help them migrate to higher tech plastic.
In an October 2018 earnings call, Visa CEO Alfred Kelly predicted more than 100 million contactless cards will be opened in the U.S. before the end of 2019. “Several of our largest clients will begin issuing contactless cards over the next few quarters,” said Kelly.
Until recently, many card issuers held back on issuing contactless cards because they didn’t think consumers were that interested. For example, in a 2017 interview with CreditCards.com contributor Carmen Chai, SunTrust executive Mark Ford noted: “Our experience has been that the limited number of merchant locations accepting contactless cards has not created strong consumer demand for the product.”
However, that could be changing now that a growing number of retailers are installing terminals that accept contactless payments. According to Visa, more than 70 percent of the 100 leading merchants in the U.S. allow customers to tap their cards or phones and go. Major retailers and dining establishments that accept contactless payments include Costco, CVS, Walgreens, McDonalds, Whole Foods, KFC, Dunkin Donuts, Office Depot, Panera, Aldi, Jimmy John’s, Foot Locker, 7-11 and more.
See related: Contactless cards: How do they work?
New York’s subways gear up for ‘tap-and-go’
The nation’s largest public transportation system is also getting ready to let transit riders buy their subway and bus fares via contactless payments. Beginning next year, New York City transit riders will be able to pay for their trips by tapping their phones or contactless cards at a turnstile, rather than purchasing metro cards.
That, too, could help drive up adoption of contactless payments as issuers cater to New York City customers. According to Mastercard, contactless payments have surged in the UK, thanks in part to the adoption of contactless by London transit.
If contactless continues to catch on with a wider group of U.S. merchants, it could become even easier to make tap-and-go payments a part of your routine. Contactless cards are especially prized for small dollar transactions, such as fast food orders, coffee drinks and drug store purchases, where customers typically just want to flash their cards and run.
How to use a contactless credit card
If you’re a Chase cardholder up for renewal or are planning to apply for a new contactless credit card, you shouldn’t have much trouble transitioning to tap-and-go payments. It’s pretty easy.
Just look for a contactless symbol on a merchant’s payment terminal (it looks like a radio wave with four lines), hold your card up close to it, wait for a beep to let you know the payment went through and voila.
As long as the merchant doesn’t ask you to verify your payment with a signature, you can grab your purchases and go.
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