Will Contactless (NFC) payments ever truly catch on in the United States? This has been one of the most popular questions over the past several years that experts have tried to answer as the market has attempted to adopt contactless transactions. Even with the introduction and development of mobile wallets since 2010 the uptake of contactless acceptance in the United States has been much slower than anticipated.
Similar to what was experienced in the UK, Australia and Canada, transit appears to be generating a spark in contactless acceptance once again as we begin 2018. By the end of 2018, New Yorkers will be able to pay their subway fares by waving cellphones or contactless credit or debit cards. In addition to the transit programs that are popping up, several issuers have also began issuing new cards which are contactless, fueling the movement even more.
Is this uptick in the re-issuance of contactless cards and transit programs the push needed to bring tap ‘n go to the front of the consumer wallet? Many industry experts think that this might be the case and if it is, Merchants need to be sure to include or add contactless to their acceptance portfolio.
As you prepare to implement contactless payment acceptance, here are some key details to consider:
- Per the 4 major Card Brands, you are strongly recommended or required to be EMV compliant if you want to accept Contactless transactions. Beyond that, Visa has already a requirement to discontinue the legacy Magnetic-Stripe contactless technology acceptance effective April 2019, and enable only EMV contactless standard, for merchants that are already accepting contactless payments or elect to enable contactless acceptance,
- EMV Contactless certifications includes Magnetic-Stripe contactless transactions as well as Mobile device transactions. Even though the volumes for Contactless Magnetic-Stripe transactions are low, they are accounted for in the EMV Contactless certification process to ensure compatibility. Discover© Zip is one known Contactless Magnetic-Stripe product in that market that still exists. As for Mobile device transactions, they rely on the EMV standard but require some specific test scripts,
- Each Brand (Visa, MasterCard, Discover, Amex) has its own proprietary contactless card application which requires the use of its own kernel in the terminal to work with (vs common EMV kernel for contact transactions). Those kernels must be individually certified by the respective brand and require their own letters of approval before beginning the EMV Level 3 (End-to-End) certification process. This adds different levels of approval to the process that do not exist for the contact certification,
- Contactless interface has its own limits and thresholds to implement. Unlike the contact interface where you typically only see a floor limit (set to $0 in the US), the contactless piece has its own Floor Limit to be set in addition to several other limits that need to be considered. The Transaction Limit allows the merchant to set the price point at which the contact interface is to be used in place of contactless. For some, this limit is not relevant and the maximum amount that can be processed through the terminal/POS is used whereas others use it only to allow contactless for low value transactions. The CVM Required Limit works just as it sounds. It dictates the point at which a CVM takes place. Once the limit is surpassed, the application will proceed to the first set of matching CVMs as prioritized on both the card and the terminal,
- Contactless parameters are more complex. Each brand has specific files/values to be defined in the parameter file. One value is defined in one tag for one brand but can be in a different tag for another,
- Quick Chip is also available for Contactless. This further reduces the amount of development and testing time to implement EMV Contactless to your portfolio.
One other thing to consider as you move forward is that there is a mandate by a majority of the Card Brands for Europe to include contactless payments for all payment terminals by 2020. As the recent history on EMV tells us, the trends and mandates in payments that we see abroad will eventually make it to the US sooner rather than later.
Be as prepared as you can be when you start your EMV Contactless journey and good luck!
--Dave Blust, Director - Certification Services at Deltec Consulting