Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Bank of America to Offer Chip Technology for Credit Cards

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/23/2012 | 08:59pm CEST

--Bank of America to include EMV chips in travel cards and offer as an option to other customers

--Visa, MasterCard are pushing U.S. merchants to upgrade payment terminals to accept chip cards

--Most banks are targeting customers who travel overseas

(Adds executive comments in the ninth, 10th and 13th paragraphs.)

 
   By Andrew R. Johnson 
 

Bank of America Corp. (>> Bank of America Corp) is throwing its muscle behind a credit-card technology aimed at cutting down on hassles U.S. cardholders may encounter when trying to make purchases while traveling abroad.

The Charlotte, N.C., bank said Monday it is including what are known as EMV chips in many of its consumer credit cards targeted at frequent travelers and high-net-worth customers. It also will include the technology in several of its mass-market consumer products, such as the BankAmericard Cash Rewards and BankAmericard cards, as an optional feature customers can request.

The move came as Visa Inc. (V) and MasterCard Inc. (>> Mastercard Inc), the world's largest payments networks, are pushing for broader adoption of the technology in the U.S., where few banks and merchants have upgraded to the standard. Bank of America, the second-largest U.S. credit-card issuer, could help to further adoption of EMV by prompting more competitors to follow suit.

"The new chip-enabled cards will improve convenience and security of customers' transactions when traveling abroad," Susan Faulkner, consumer and small-business-products executive for Bank of America, said in a statement.

Last year, Bank of America made the technology available on some of its commercial cards, and its latest move follows efforts by other large banks, including J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.), Citigroup Inc. (C) and Wells Fargo & Co. (>> Wells Fargo & Company), to upgrade some of their wealthier customers to the chip technology.

EMV--which stands for EuroPay, MasterCard and Visa--is standard in many countries in Europe and Asia, where both banks and retailers have adopted the technology, partly to cut down on fraud from counterfeit cards. Cards using the technology are considered more secure than credit cards with only magnetic stripes--the standard in the U.S.--because cardholder data are stored inside a computer chip, making it difficult for scammers to hack.

However, U.S. customers often run into problems using their traditional credit cards in foreign countries, where self-service kiosks, such as train-ticket machines, typically can read only chip-based cards. To cut down on customer-service headaches and hang on to their best customers, banks in the U.S. have begun including EMV chips in travel-oriented cards.

Bank of America's move "is very consistent with what we're seeing across the board," said Julie Conroy McNelley, a research director for Aite Group LLC, a financial-services research firm. "They're looking to add utility for their international travelers and make sure they don't get inconvenienced when traveling overseas with just a mag stripe, which doesn't work so well there anymore."

About two million of Bank of America's credit-card customers have used their cards overseas in at least two of the last 12 preceding months, according to Titi Cole, retail-products executive for Bank of America's consumer bank.

"We knew that for customers who travel internationally...it was starting to become a bit of a challenge if they couldn't use their cards," Ms. Cole said during an interview.

U.S. banks aren't likely to embark on a full-scale rollout of EMV cards in the near term because merchants must upgrade their systems to handle the cards, said George Peabody, director of the emerging-technologies advisory service for Mercator Advisory Group.

"A mass replacement isn't needed and it doesn't make sense" until that occurs, Mr. Peabody said, noting such cards can cost banks as much as $2 more each than traditional cards, depending on the size of bank.

"It is more expensive to issue but we think that by...meeting that customer need...you'll be more likely to use our [card] when you travel, and you're more likely to just keep using it," Ms. Cole said.

About 3% of payment terminals in the U.S. can handle EMV cards currently, according to an April report from Aite Group.

Bank of America's cards will continue to include a magnetic stripe so customers can use them in the U.S., and they will continue to prompt cardholders to sign for their transactions, the company said. Customers will be able to request chip cards in branches and over the phone starting this week and online later this year.

Visa and MasterCard have been making an aggressive push to get U.S. banks and merchants to adopt EMV. In the past year, the companies, which contract with banks to issue their cards, have set an October 2015 deadline by which U.S. merchants must upgrade their checkout terminals to accept EMV cards or face higher fraud-liability costs.

Banks typically pay for a large portion of costs that result from card fraud today.

Discover Financial Services (>> Discover Financial Services) and American Express Co. (>> American Express Company), which operate competing payments networks, have recently rolled out their own roadmaps that also include the October 2015 liability shift for fraud costs.

Write to Andrew R. Johnson at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
11:24p MOODY : affirms Kuwait’s rating; upgrades outlook to stable
11:23p DP WORLD : negotiates acquiring stake in Russian ports operator
11:21p FLORIDA DEPARTMENT OF CITRUS : View More American Academy of Pediatrics Releases New Guidelines on Juice Consumption for Children May 22, 2017
11:14p KOREA ELECTRIC POWER : to turn 30,000 jobs into regular ones
11:13p INTERNATIONAL CONSOLIDATED AIRLNS : British Airways Says Computer Outage Causing Global Delays
11:11p INTERNATIONAL CONSOLIDATED AIRLNS : British Airways cancels flights from Heathrow, Gatwick due to IT crash
11:06p AMMB BERHAD : Hardcopy Statement Fee for Current and Savings Accounts
11:06p AMMB BERHAD : AmInvest Introduces AmIncome Regular 3
11:00p INTERNATIONAL CONSOLIDATED AIRLNS : Computer breakdown forces British Airways to cancel all flights 
10:58p INTERNATIONAL CONSOLIDATED AIRLNS : British Airways cancels scheduled flights from London airports Saturday
Latest news
Advertisement
Hot News 
-4.92%SUN PHARMACEUTICAL INDUSTRIES : Pharma 4Q Profit Falls 13.6%
2.28%ELECTRA PRIVATE EQUITY : Epiris to keep focus on UK assets after Electra split
-4.04%BA and Iberia plan third-party booking surcharge, Amadeus shares hit
8.47%SPIRAX SARCO ENGINEERING : Sarco to buy thermal tech firm Chromalox for $415 million
3.25%Fosun, others eye Australia's Origin Energy gas assets worth $1.5 billion - sources
Most Read News
05/26 Merkel pushes back against renewed Trump criticism of surplus
05/26 Chipotle says hackers hit most restaurants in data breach
08:29a THE LATEST : British Airways cancels most flights from London
05:06a In Aramco IPO pitch, Canada plays up its natural resources expertise
05/26 JBS : Brazil's JBS says Joesley Batista resigns as chairman
Most recommended articles
05/22 NOBLE : shares tumble after S&P ratings downgrade
01:59p Reliance Communications hit by Indian mobile price war
01:51p GENERAL MOTORS : GM says ISS advises against Greenlight share plan, board nominees
01:27p FAIRFAX FINANCIAL : to sell 12.2 pct of Indian insurer ICICI Lombard
05:06a In Aramco IPO pitch, Canada plays up its natural resources expertise