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 andrew.r.johnson@dowjones.com.

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
03:06p HABIB BANK : Finance minister Pravin Gordhan needs to put up or shut up on 100% black-owned bank "We have been left with no alternative but to take this to Court" - Hamza Farooqui, Director of Vardospan
03:06p Global Feed Premix Market to Reach $12.5 Billion by 2025 - Industry Forecast & Analysis - Research and Markets
03:06p AMAZON COM : Greenlights Untitled McLaren Racing Docuseries Exclusively for Prime Video
03:06p Dynatronics Welcomes Cynthia L. McHenry as Its New Vice President of Operations
03:06p SCYNEXIS, Inc. to Present at the 16th Annual Needham Healthcare Conference
03:06p FISERV : Nearly 30 Banks and Credit Unions Select Corillian Online and Mobiliti from Fiserv for Integrated Digital Banking
03:06p AMERESCO : Rhode Island College Partners with Ameresco to Reduce Energy Consumption
03:06p DesignHouse, Aeris to Help Chicago Public Schools’ Students Learn About Internet of Things
03:05p ORACLE : Four Cornerstone LLC Achieves Oracle PartnerNetwork Specialization for MySQL 5
03:05p ACADIA PHARMACEUTICALS : to Present at Needham & Company’s 16th Annual Healthcare Conference on April 5, 2017
Latest news
Advertisement
Hot News 
-4.72%Weak sterling supports FTSE ahead of Brexit trigger, mid caps struggle
12.43%HARDIDE : Shares Rise on Airbus Supplier Approval
2.75%European shares inch higher as Brexit divorce process to begin
-10.82%JOHNSTON PRESS : Swings to Large Pretax Loss, Shares Dive
5.12%UK's Stagecoach confirms profit target, rail revenue rises
Most Read News
03/28 SAMSUNG ELECTRONICS : With new phone due, Samsung dials down on safety message
03:46a TOSHIBA : says Westinghouse had $9.8 billion in liabilities as of end December
03/28 Tesla deal boosts Chinese presence in U.S. auto tech
07:36a After crippling cost overruns, Toshiba's Westinghouse files for bankruptcy
05:21aDJDEUTSCHE BOERSE : European Commission Prohibits Recommended All-Share Merger Between Deutsche Boerse AG And London Stock Exchange Group Plc
Most recommended articles
08:15aDJS&P 500, Nasdaq Futures -- Technical Analysis
03/27 Dollar hits four-month low as Trump trade deflates
08:52a AUDI : VW files complaint over searches of its dieselgate law firm
08:39a Airlines warn of disruption if no quick Brexit aviation deal
08:38a FDA, Mylan silence on generic Advair may be good news for GSK