Contactless technology in greater supply

On April 23, 2013, at the CARTES America conference in Las Vegas, the Munich, Germany-based Smart Payment Association said shipments of payment cards embedded with contactless technology are growing at the fastest rate ever recorded. Twenty-three percent of all smart payment cards shipped in 2012 came with contactless technology, according to the association.

Its companion white paper, Unleashing the Power of Smart Payment, noted that the Western Europe and Asia Pacific regions saw the largest increases in shipments of contactless cards, up by 106 percent and 111 percent, respectively, from 2011. Shipments of dual-interface, chip and PIN cards are growing worldwide at 77 percent per year, the SPA added.

Based on data accumulated by the SPA's six member organizations, including contactless card manufacturers Gemalto NV and Oberthur Technologies, more than 975 million smart cards shipped in 2012, representing a 9 percent increase from 2011. North America still has the smallest smart card footprint in the world, with 84 million cards in circulation, compared with the region with the most – 322 million in Europe, according to the SPA.

Contactless card shipments in North America only increased by 1 percent in 2012, with Canada representing most of that increase, the SPA found.

Data security is smart

"The data from this annual review points to a rapidly changing payment marketplace," said Andreas Strobel, President of the SPA. "NFC contactless payment is becoming a priority, but without effective collaboration between global and regional standards bodies, the ability to deliver on consumer expectations will be constrained."

The SPA noted that "the harmonization of ISO [International Organization for Standardization], SEPA [Single Euro Payments Area] and EMVCo standards will ensure the global interoperability of new NFC contactless services for consumers."

But the SPA recognizes that interoperability cannot be achieved at the expense of security. It said the focus on increased card security continued in 2012, with 56 percent of global shipments featuring Dynamic Data Authentication (DDA) or Combined Data Authentication (CDA) mechanisms on the cards. In 2011, 47 percent of cards shipped had those security protocols, the association added.

"With attempts to combat card fraud always high on the agenda and the increasing adoption of contactless payments, the move to DDA/CDA technology in the more mature markets is a significant step in increasing payment security," the SPA said.

Finally, the SPA noted that the growth of the global contactless card market hinges on inter-agency collaboration to support and accelerate the adoption by consumers of near field communication-based proximity payments with contactless bankcards.

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