Consumers who travel overseas may present the best opportunity for U.S. card issuers to roll out EMV chip cards and remain competitive in that market, according to Randy Vanderhoof, executive director of the Smart Card Alliance.
More card issuers will launch EMV cards that target travelers because the chips make card acceptance more likely overseas, enabling issuers to promote that benefit over traditional magnetic stripe credit cards, he believes.
“The dominos are falling, and now it’s a matter of competitive positioning,” Vanderhoof says. “No issuer wants to see their high-end portfolio [of consumers who travel] going to the competition because the international traveler feels having a chip is an advantage.”
Most recently, JPMorgan Chase & Co. rolled out the first EMV airline credit card with a chip version of its British Airways credit card (
Other issuers that have started issuing EMV cards in the U.S. include Bank of America Corp., Citigroup and U.S. Bancorp.
“Once the first issuer started to issue EMV cards, now every major brand is coming out with their version to stay competitive and, more importantly, it’s not just about customer convenience,” says Vanderhoof, noting that issuers are seeing an increase in activation rates and spend among international travelers. “Therefore, there is a real business case for banks to issue cards for the traveling population because it’s paying for itself.”
Consumers also are much less likely to resist paying annual fees when the card issuer is offering “something additional like the convenience of international acceptance,” Vanderhoof says. And travelers also may be more concerned about security, which EMV provides, and that will encourage them to use cards more than cash while traveling, he says.
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