U.S. Bancorp Puts Its Signature On EMV Cards

U.S. Bancorp plans to begin issuing EMV chip credit cards that also include a tap-and-go payment function to its customers this month.

The Minneapolis-based bank is working with the French company Oberthur Technologies SA, which is manufacturing the cards, and Visa Inc. to offer the smart cards to domestic customers who are frequent international travelers, according to its June 10 announcement.

U.S. Bancorp is one of 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 yet domestically. 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 (see story).  However, U.S. Bancorp said 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.

“While we believe EMV is important for our international travel cardholders, we are committed to driving contactless mobile payments in the United States,” Cliff Cook, the chief marketing officer for U.S. Bancorp’s Retail Payment Solutions business, said in a press release.

The bank is using Visa’s payWave contactless technology, which other domestic issuers also use in card rollouts and in mobile-payments trials that allow consumers to tap their smartphone against terminals to make purchases.

U.S. Bancorp’s cards will also include a magnetic stripe so customers may still use them at U.S. merchants, the majority of which do not have the proper terminals to accept EMV cards.

Adding contactless technology, which many U.S. card issuers already use, to an EMV card could help U.S. Bancorp stand out from competitors. 

“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.

The cost to add a contactless function to a card is incremental, Peabody said. He estimated it would cost an additional 30 cents to 40 cents per card to include the technology on top of the approximately $2 it costs to produce an EMV card.

U.S. Bancorp is offering the card as part of its FlexPerks Travel Rewards program, which gives customers rewards for booking flights on more than 150 airlines. It plans to make the card available to 20,000 program participants this month, it said.

EMV cards often require a user to enter a PIN to authenticate a transaction, though some U.S. issuers that are issuing the cards said they are using signature authentication in addition to or instead of a PIN.

U.S. Bancorp’s cards will be signature based, Peabody said.

U.S. consumers have frequently encountered problems trying to use their mag-strip credit cards in foreign countries because of technical differences with payment terminals as well as the refusal of some overseas merchants to accept them, 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, which caters to U.N. employees, 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 U.S. retail locations (see story).

What do you think about this? Send us your feedback. Click Here.