Reinventing a 32-year-old multi-account card for the EMV era

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Achieving the coveted “top of wallet” status is tough for banks, not least because their own credit and debit cards often compete with one another for priority status with the same customers. Some banks have addressed this dilemma with multi-account cards or push-button cards that can operate in credit or debit mode, but both approaches have faced limitations.

While multi-account cards supporting credit and debit are more popular in Europe and Asia, relatively few U.S. issuers offer them because they require special marketing and support. However, Kansas City, Mo.-based Commerce Bank has seen long-term success with a multi-account credit card it’s offered since 1985.

Commerce's product enables customers to opt spontaneously to route purchases as credit or debit at the point of sale, but it was due for an update — the issuer's “Special Connections” card with dual credit and debit functions was based on expiring magnetic stripe card technology, and the advent of EMV in the U.S. posed some serious technical challenges to continuing the product.

“We had a really diverse group of customers already using the Special Connections card—from millennials to seniors—and we wanted to find a way to continue supporting it but there weren't any immediate solutions within our reach,” said Chad Doza, senior vice president of consumer credit cards at Commerce Bank, which has about 200 branches in the Midwest.

Working with TSYS, its processor, and EMV card technology experts at Mastercard, Commerce Bank last fall devised a new approach in-house to continue offering the Special Connections card with EMV leveraging application identifiers (AIDs) and multiple BINs assigned to the card, Doza said.

“We are the first issuer in the U.S. that supports EMV with a mult-account application," Doza said.

It's not the only issuer to try, of course. In 2010, Citigroup began testing a push-button card with Dynamics Inc. that allowed users to spend either from the card's balance or from a separate stash of reward points. Despite heavy marketing, the product stalled in pilot for two years and was never released commercially.

Multi-account cards may be due for a resurgence as banks look for ways to stand out in an increasingly competitive field, some observers say.

“Issuers learned a lot during the whole process of upgrading their cards to EMV, and the industry’s challenge in finding a common AID to route debit transactions opened their eyes to new capabilities with multi-accounts,” said Jack Jania, senior vice president of global alliances at Gemalto, which produces and provisions payment cards.

Commerce Bank also has upgraded its EMV Special Connections credit card to support the Toggle feature, which was introduced in 2015, that gives customers the option to pre-select which account is used for certain purchases based on merchant type or amount, through Commerce’s online banking portal, and consumers are responding positively, Doza said.

When consumers swipe or insert their Special Connections EMV credit card into a payment terminals—whether the terminal is chip-enabled or not—the terminal issues a prompt giving the user the opportunity to route the transaction as credit or ACH debit.

Commerce Bank separately supports Apple Pay, but not Android Pay and so far has not announced plans to add Near Field Communication technology to the Special Connections card for contactless payments.

Though Gemalto wasn’t involved in Commerce Card’s EMV upgrade, Jania said he’s seeing growing interest from other issuers in flexing the capabilities of EMV technology while mixing and matching different card configurations. “I think we’re gradually going to see more issuers leveraging the technical capabilities EMV provides to differentiate their cards,” he added.

TCF Financial of Wayzata, Minn., for example, recently moved to differentiate its debit cards by adding NFC contactless capabilities to drive more usage. TCF offers credit cards via a third-party issuer, First National Bank of Omaha.

It remains to be seen whether more issuers will adopt the multi-account approach Commerce Bank supports, because it requires extra attention and may not support every bank’s revenue model.

“The win for a financial institution like Commerce Bank is they’re giving consumers the convenience of a debit card but they’re getting the [higher] credit card interchange on other transactions,” said Sarah Grotta, a director with Mercator Advisory Group.

“What could make combination-card products succeed is a really intuitive user interface and ongoing interaction with the customer to help cardholders select which transaction types best fall into the ‘pay now’ or ‘pay later’ category,” she said.

Commerce Bank has seen growing demand for the Special Connections card since the EMV upgrade, Doza said, noting that it’s available as either a Visa or Mastercard.

“Customers ... can fine-tune their spending and maximize their participation in rewards, creating a convenient and secure way to use multiple accounts while carrying less plastic,” he said.

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