ICBC, the largest bank in China, has awarded Gemalto a three-year agreement to continue supplying contactless cards. The contract addresses multiple card schemes-branded cards including Amex, China UnionPay, JCB, Mastercard and Visa.
Chinese consumers are increasingly turning to digital payment methods. According to the China Banking Association, China had over seven billion bank cards in circulation by the end of 2017. With the government's strong push for POS upgrade in the past years, China's contactless payments market, particularly in the credit card segment, is set to grow. Statistics show that there are over 31 million POS terminals installed in China, with the majority compatible with contactless transactions.
Built on Gemalto's solutions, ICBC's dual-interface cards (both contactless and chip) enable consumers to make payments by inserting them into point-of-sale (POS) terminals or tapping them against contactless-enabled payment terminals. The latter presents a huge value to consumers as it is intuitive and can shorten the checkout time by 63 percent as compared to cash transactions.
ICBC's cards follow the security of global EMV standards. They leverage Gemalto's smart chip not only to secure cardholders' credentials, but also encrypt its communication with the POS terminals and processing networks.
"As the digital security leader, Gemalto has been partnering with ICBC for almost 20 years. Our solutions, which are at the heart of modern life from payment to enterprise security, are helping to support ICBC's global business expansion strategy and accelerate China's cashless revolution," said Michael Au, senior vice president Banking and Payment APAC for Gemalto.
"Dual interface payment cards will allow consumers to pay faster, without compromising security. Since these cards can help improve operational efficiency and security, we also hope this effort will encourage local merchants to adopt EMV chip and contactless-enabled POS."
As China continues its chip card migration, card schemes such as China UnionPay, Mastercard and Visa are quickly adding contactless capabilities to their card base, resulting in the country having the largest dual interface market, in terms of annual volume.
First published in FinTech Innovation