While major card issuers such as
In New York, Boston and San Francisco, BofA will force a mass NFC upgrade by mailing new contactless credit and debit cards to all of its consumer card holders in those regions. The surgical contactless strike will cover about 4 million Visa cards — a sharp contrast to the industry standard of replacing cards only as they expire.
“We didn’t want to go with rolling thunder or a dribble of new contactless cards—we wanted to saturate a few markets with NFC, giving us a chance to promote contactless and then thoughtfully measure progress,” said Mark Monaco, BofA’s head of enterprise payments.
BofA picked the cities for its bombardment based on their density of contactless-enabled merchants, plus the recent moves of mass-transit systems to adopt contactless payments, he said.
“Having acceptance matching with issuance is a plus, and obvious things like transit deployments in New York and Boston coincide with our move,” Monaco said.
More than half of all transactions in the U.K. and Australia are now contactless, about a decade after issuers in those markets committed to NFC-enabled cards, and in Bristol it’s
In the U.S., issuers made a failed push more than a decade ago. Today, more NFC-enabled terminals are in use for accepting mobile and contactless EMV transactions. Twenty of the top 25 U.S. card issuers will be distributing contactless credit and debit cards by the end of the year, according to Visa.
BofA is still hedging its bets by setting aside several months at the end of this year to analyze whether consumer transaction volume has risen enough to justify the expense of a national rollout of NFC-enabled cards.
Monaco hopes contactless cards will displace many small-ticket cash transactions—particularly helped by mass-transit—driving up overall card volume.
“We’ll see what happens. The cost of producing contactless cards is higher than contact-only cards, but we expect that even with a very modest lift in the number of transactions, the move to contactless should pay for itself,” Monaco said.
One thing contactless isn’t likely to change is the rate of mobile wallet usage at the point of sale, according to Monaco.
“Mobile payments are gaining ground for in-app payments like Uber, but where people are used to paying with a card, that’s not likely to change. In stores we used to swipe, now we insert and then we’ll tap, but we’re still using cards,” Monaco said.
The fact that J.C. Penney
“Mastercard says about 60% of the top U.S. merchants accept contactless cards, and that percentage may be higher in the top NFC use cases. But not all merchants have to add contactless for this to succeed,” he said.
