U.S. Bancorp this month plans to begin issuing EMV chip credit cards that also include a tap-and-go payment function.
The Minneapolis company said Friday that it is working with Oberthur Technologies SA of France, which is manufacturing the cards, and Visa Inc. to issue the cards to 20,000 domestic customers who are frequent international travelers.
U.S. Bancorp is among several U.S. banks that have recently said they were using the EMV Integrated Circuit Card Specifications, which are standard in foreign countries but have not gained traction in the United States.
EMV cards are considered more secure because they store payment information inside computer chips, making them harder to hack than cards with a magnetic stripe.
JPMorgan Chase & Co., Wells Fargo & Co. and SVB Financial Group's Silicon Valley Bank have announced plans in recent months to issue EMV cards.
U.S. Bancorp, however, said that it is the first to include in its cards "contactless" technology that allows a customer to pay for a purchase by waving the card near a special merchant terminal.
"We definitely think it's a better solution for our customers," said Cliff Cook, the chief marketing officer for U.S. Bancorp's Retail Payment Solutions business. "It's one card for consumers whether they're traveling in Minnesota or in Madrid." The company is already beginning to mail the cards to customers, Cook said.
U.S. Bancorp is using Visa's payWave contactless technology, which is also used by other domestic card issuers as well as in mobile payments trials that would allow consumers to tap their smartphone against terminals to make purchases.
U.S. Bancorp's cards will include a magnetic stripe so that customers can still use them at U.S. merchants.
"This is a top-of-wallet play. And with mag stripe and contactless you can use it at home, and with EMV you can use it when you travel," said George Peabody, the director of the emerging technologies advisory service at Mercator Advisory Group in Maynard, Mass.
U.S. Bancorp is sending the cards to its existing FlexPerks Travel Rewards program members.
EMV cards often require a user to enter a PIN to authenticate a transaction, though some U.S. companies that are issuing the cards said they are using signature authentication.
U.S. Bancorp's cards will be signature based, Peabody said.
U.S. consumers have frequently encountered problems trying to use their mag-stripe credit cards in foreign countries, prompting banks here to offer the cards to their customers who are heavy travelers.
State Employees' Credit Union in Raleigh, N.C., and United Nations Federal Credit Union issue EMV cards to U.S. residents.
Travelex Currency Services Inc. last year announced plans to offer prepaid EMV cards in foreign currencies at 180 retail locations in the United States.
