Contactless cards have been slow to take off in the U.S., but an endorsement from the largest domestic issuer may help speed up adoption.
Chase, the consumer banking arm of JPMorgan Chase & Co. JPM, -2.04% announced Wednesday that it would be sending out contactless Visa Inc. V, -0.14% credit cards beginning in the first half of 2019. The company will roll out tap-enabled cards on an ongoing basis when customers open up new accounts or have a card that’s up for renewal. Chase will launch contactless debit cards starting in the second half of 2019.
Contactless cards are popular in many international markets, but early efforts to gain traction in the U.S. were largely unsuccessful due to the complexities of merchant acceptance. Businesses initially weren’t keen on terminal upgrades that would have enabled them to accept early contactless cards, though many now have the ability to accept tap-and-pay cards via the new hardware they purchased to accommodate chip cards a few years back.
Visa said on its latest earnings call that more than half of all in-person transactions in the U.S. take place on a contactless-enabled terminal, even if they don’t involve a contactless card.
Dan Sanford, Visa’s head of product, told MarketWatch that he sees Chase’s adoption of contactless cards as the beginning of an industry move. He said the company’s big focus is on accelerating consumer adoption in places where speed and throughput are most important, such as quick-service restaurants, grocery stores, and pharmacies.
Transit is a popular contactless use case in the U.K., and Visa expects that it will become popular in the U.S. as well once major transportation systems roll out the ability to tap and pay at turnstiles and other public-transit gateways. The Metropolitan Transportation Authority will begin enabling these capabilities in May 2019, according to Sanford.
