Contactless EMV: Speed Up Transactions. Gain Revenue.

A Credit Union Resource Page for the Newest Way to Pay




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Contactless chip cards include an embedded chip and NFC (near field communication) antenna that allows cardholders to “wave” their Contactless card over a Contactless-enabled point-of-sale (POS) terminal. The antenna transmits the card’s payment info to the Contactless-enabled payments terminal using the same security as EMV by generating a one-time use code with each transaction.

At checkout, cardholders tap or hold the card within 3 inches or so to a POS terminal, then the card communicates with the terminal via radio waves and creates a dynamic cryptogram. The transaction is then complete, just as with a chip card. Physical contact between a device and a payments terminal is not required.

Studies have shown that the average time ‘tap’ transactions takes are about 2 seconds, whereas a standard EMV transaction takes 13-15 seconds. In comparison, the average time for an EMV transaction from beginning to end is roughly 30 seconds. The difference is between the time it takes to tap or wave the card and insert the chip, aka “dip the chip.”

Contactless cards bring the same dynamic EMV security with an improved member experience. While implementations differ among issuers, Contactless cards use the following security measures, according to Smart Card Alliance:

There are some misconceptions about Contactless card security. Read Mastercard’s Dispelling Myths: the Reality about Contactless Security for more.

Many merchants around the world accept Contactless payments. A few examples are McDonald’s, Macy’s and Walgreens. Click here to search a full list of merchants that are Contactless enabled.

No, there is not a mandate or a requirement to move to Contactless today, but your financial institution should consider adding it to its roadmap, if it has not already. As the market and industry evolves, especially with most-used use cases, like ODA for mass transit and overall rapid merchant adoption, it is highly recommended to begin to migrate to Contactless.

The answer can be summed up in three main benefits:

Seamless Member Experience

Increased Transactions & Spend

Competitive Differentiation

Yes, both debit and credit can be Contactless.

PSCU is ready to start conversations with you, whether you are planning your strategy and roadmap or are ready to launch, we can support your Contactless cards roadmap for either portfolio. However; we strongly suggest you speak with your PSCU Account Executive about considerations for doing both.

They will keep the same number – there’s no need to reissue.

Migrating to a Contactless cards is an investment in the growth of your card portfolio. Many of the large issuers will be offering Contactless cards for the improved consumer experience. This is an opportunity to become top-of-wallet among your credit union members for their card purchases, offer a seamless member experience, and increase revenue through additional transactions and speed.

No, Contactless is not available today for ATM cards. As a reminder, Contactless cards will continue to function properly in ATMs as the card still works in both contact and Contactless ways.

Standard protocol is not market ready. When it is, PSCU will be able to provide guidance on hardware/software installations.

Reach out to your instant issuance hardware vendor to determine if your hardware is Contactless-ready and the costs and timing associated with any changes. Requirements include EMV scripting upgrades as well as the hardware to support Contactless.

The actual chip costs vary, and as Contactless cards penetrate the market, it will drive the cost of the chips down. The costs associated with issuing Contactless cards vary based on program fees, network fees, third-party card vendors, etc. Below are some typical line item costs associated with issuing Contactless cards. We recommend discussing the specific costs with your PSCU Account Executive or submit an inquiry via the Learn More button on this website.

Possible Network Costs:

Possible CUSO Costs:

Depends on your CUSO’s plastics implementation timelines. We recommend discussing the specific project timelines with your PSCU Account Executive or submit an inquiry via the Learn More button on this website.

Resources required for a move to Contactless can vary per credit union. A card portfolio manager and marketing resource are examples of staff resources needed on a plastic upgrade.

It’s important that credit unions fully understand their renewal codes, the dates they are issuing for expiration and how that plays into the chip expiration. Reports are provided that show chip expiration and card expiration and while this is on the “honor” system with Visa today, it most likely won’t be in the future.

Card expiration is the date determined by the core or the host platform that allows the date to be “used” through.
Chip expiration is the date determined by the associations for the length of time the chip will be good through. This is also known as the ‘Off-the-Street-Date’ with Visa. A physical card expiration date cannot exceed the chip expiration date.

Relevant together because:
Visa – card expiration cannot exceed the chip expiration date
MC – N/A for card to chip

Like EMV, contactless uses dynamic variables to create a one-time authorization value, has unique CVV values from standard mag stripe that can be used to detect a skimmed card, offers spending limits or the need to enter a PIN after so many transactions are driven by merchant.

If CVM is required by reader for the transaction, the card will attempt to select a common CVM supported by the card and reader, If more than one CVM is supported by the card and reader, the CVM is chosen based on the CVM hierarchy of: Online PIN and then Signature.

Chip expiration dates vary by manufacturer and association, lasting for 12 year cycle from release to the market. Physical cards will last standard renewal timeframes by your credit union with storage and usage affecting the physical card lifecycle. Evaluate chip expiration to see how it coincides with renewal terms

Contactless chip cards can support two different types of contactless transactions. Contactless EMV and Contactless Mag Stripe Data (MSD). The Contactless EMV is covered under the liability rules however the Contactless MSD is not. However, because the chip card is set up to support both, and will always attempt to complete the most secure type of transaction, if the terminal cannot support Contactless EMV, full charge back rights to the issuer.

Yes, digital stocks can be used for contactless.

Dollar limits for a contactless transaction are merchant driven. Contactless transactions are always sent to a host for processing so many merchants have increased the limits to allow for much larger purchases using the contactless interface.

Anywhere from 1-2 inches depending on the type of POS terminal.

Stolen token data cannot be provisioned or replicated on another device. Tokens and devices are linked together, which is one of the many security mechanisms in place that prevent tokens from being used outside of the device.

A contactless card will cost a little more than a contact EMV card due to the fact the card has additional functionality via the RFID antenna. Additionally, plastic order pricing can fluctuate based upon the number of cards ordered by the credit union.

Contactless transactions do not fall under the liability shift for chargeback rights. They would fall under normal non-chip related chargeback scenarios.

Each association provides their process flow on shelf life dates. Mastercard is still three years initially with a potential for three +1 year recertification. While Visa is providing 10 years.

While we are seeing more devices become enacted for payments, the case studies from overseas shows contactless cards are still growing faster than mobile/wearable contactless payments. Right now, mobile/wearable contactless payments represent just 1% of the transactions processed versus card payments, showing that consumer preference for cards is high. A contactless strategy that places your institution in each channel is effective.

Contactless devices offer several distinct security benefits over traditional contact payment methods such as mag strip and chip cards. Skimming is completely sidestepped because the contactless card never has to make contact with the POS terminal like with traditional contact payment methods. Additionally, the use of tokenized card numbers makes any stolen card information impossible to monetize or utilize for a fraudulent transaction. Contactless card fraud in other markets remains extremely low. As merchants and consumers continue to adopt this technology, the anticipation is that card present fraud will continue to decrease.

In order for a contactless card (or contactless device) to process at a POS terminal, the card (or device) is required to be within 1-2 centimeters from the POS reader with no obstruction. The POS reader will not pick up on other contactless cards in the wallet or purse.

A contactless card will have the swipe, insert and tap functionality. If the tap functionality does not work, then the cardholder can insert the card into the POS terminal to complete the transaction, if neither the tap or insert functionality is available then they can revert to swiping the card. A true fallback transaction doesn’t apply to contactless transactions. If the contactless interface isn’t working, the cardholder can dip or swipe. If the chip is unable to conduct a dipped contact transaction and then goes mag, the transaction will be conducted as a POS 80 fallback.

Each transaction has a unique ISO message identifier. There is no fallback for a contactless transaction.

A contactless card will have the RFID antenna that integrates / plugs into a chip. Remember, this transaction process flow is still an EMV transaction; meaning the flow still follows all of the EMV protocols for the approval / denial of the transaction. In terms of the chip, yes, it is a different chip than the contact EMV card.

Service Code is “201”.

If an antenna was to go bad/not work, the other payment methods of insert or swipe will be available for the cardholder. The contactless interface is powered by the antenna. If the contactless interface does not respond at the POS, most likely it is an issue with the antenna. This can be proven if the chip is still able to conduct contact dip transactions.

More and more merchants are adding support for contactless payments of all kinds (physical cards and mobile devices). As with any new technology, market adoption by merchants will take some time as merchants invest in payment terminal technology. Many merchants are contactless-ready as a result of the upgrade to accept EMV cards just a few years ago.

It will post with a POS entry mode of 07 or 91.

A credit union does not need to have any IT involvement in moving to contactless cards. All work from the profile set up is handled by PSCU.

Yes, it is possible to do a natural reissue into contactless card issuance.

A typical timeline for a project is six months.