CM Magazine

3 Reasons Now is the Time for All Financial Institutions to Switch to Dual Interface Contactless Cards

The expansive world of card payment technology is constantly evolving as new methods are developed to increase data security and cater to customer preferences.

In some instances, top-down mandates have served as the catalyst for those changes. For example, in 2015, financial institutions were required to add Europay, Mastercard and Visa (EMV®) chips to their cards to reduce the risk of fraud at the point of sale. Larger banks and financial institutions quickly shifted, whereas some small and mid-size institutions took months or years to convert their cards.

In other cases, developments in payment card technology are driven from the bottom up. For instance, dual interface cards (which still contain the chip but also offer contactless functionality) experienced a surge in their popularity during the pandemic amid consumer fears of viral spread initiated by surface contact. While dual interface contactless technology was introduced decades ago, many financial institutions made the switch only after the sudden rise in consumer demand.

Others (including smaller and more rurally located providers) have been more reticent to adopt dual interface contactless cards due to cost, perceived complexity of switching, reluctance to update their technology or lack of immediate demand.

Here are three reasons why financial institutions that have not yet converted should consider introducing dual interface contactless cards to their customers now to avoid a “have-to scramble” scenario that may come in the near future:

  • Chip Suppliers and Market Pressures: Supply chain disruptions for microchips during the COVID-19 pandemic have had a lasting effect on businesses across industries and geographies. Chip manufacturers responded to the crisis by prioritizing production for markets such as automobiles, appliances and smart devices, which had sweeping ramifications for smart card providers. Even as supply issues have abated, manufacturers of EMV chips face a growing demand for contactless specifically and have focused production on contactless EMV chips. The Smart Payment Association (SPA) reports that 84% of all card shipments in 2022 had contactless functionality, which was an eight-point increase from 76% in 2021. In addition to that, payment brands are heavily marketing contactless point of sale, creating consumer demand. Embracing contactless cards now might help insulate financial institutions from encountering supply shortages and ensure that their customers can shop and pay with a dual interface contactless card now rather than later.
  • Contactless Cards Offer a Better Experience and Greater Functionality for Users: Contactless dual interface cards afford users a quicker, seamless transaction at the point of sale than contact EMV cards while still providing the same security benefits. Financial institutions that do not yet offer this technology could find consumers going to larger providers that offer contactless cards, which may result in a loss of top-of-wallet status.
  • Ease in Switching and Financial Benefits Make Sense for Financial Institutions: Regardless of the geography, client base or business footprint of a given financial institution, switching to contactless dual interface cards makes sense for several reasons. Contactless card ease of use has been attributed to helping consumers replace small-bill spending (think vending machine purchases, single-item food or beverage purchases at a gas station or any small bill transactions historically using cash). For example, a 2020 study from Mastercard found that 80% of contactless transactions were less than $25. Because contactless cards help encourage purchases that are both large and small, financial institutions can benefit through increased interchange revenue. Additionally, the terminals, software and point-of-sale systems required to support contactless cards are already in place throughout much of the country, which removes the barrier of adoption—even in remote and rural areas.

There are already more than 495 million contactless Visa credit cards in circulation in the United States and more than half of U.S. adults use some form of contactless payment. These numbers are only anticipated to grow in the near future—the global contactless smart card market size is estimated to reach $21.26 billion in 2023 and nearly double to $39.37 billion by 2030.

Financial institutions can meet the needs of the market and their customers by strategically switching to contactless dual interface cards. They may offer a competitive advantage and help protect institutions from consumers who may be inclined to seek out providers offering more modern contactless card options. Additionally, switching now to contactless options helps these institutions manage their supply chain as chip manufacturers reduce production of EMV-only contact chips.

Companies considering the switch to contactless cards can simplify the process by working with a trusted payment solutions provider that has the resources and industry knowledge needed to guide the process from consultation to delivery.

At CPI, we advise financial institutions that are ready to make the switch to reach out to their processor to discuss appointing a dedicated project manager to serve as the lead and point of contact. We also suggest institutions appoint an internal project manager to drive implementation, direct company inquiries, share best practices and act as a liaison between the organization, the payment processor and a third-party solutions provider like CPI.

By appointing the right resources in switching to contactless dual interface cards now, financial institutions can eliminate hurdles, smooth the adoption process and maintain excellent customer support along the way without having to deal with the scramble and stress that may loom in the future.

EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.

About the Author: John Lowe is the EVP Endto- End Solutions at Littleton, Colorado-based CPI Card Group (CPI). In this role, Lowe works alongside financial institutions to facilitate the seamless shift and implementation of contactless card services. CPI Card Group is a payment technology company providing a comprehensive range of credit, debit and prepaid card solutions, complementary digital solutions and Software-as-a-Service instant issuance. Learn more at