The payments industry is flooded with new card technology. EMV is at the forefront of the conversation today, but many alternative technologies exist as part of the equation.
Dominion Credit Union ($249.4M, Richmond, VA) is using radio frequency identification (RFID) technology in its next generation card solution. Like EMV, RFID technology is a critical step in making cards more secure and easier to use than traditional magnetic stripe cards.
Dominion members can simply wave or tap these cards next to the Visa PayWave POS contact reader to process their payment. RFID contactless cards create unique codes using data from the chip and terminal for each transaction. The transaction codes are one-time use only, which makes it difficult for thieves to successfully pull off fraudulent transactions. Plus, in the payment process, the card never actually leaves the members’ hands.
“We wanted to reinforce that we’re always looking for new, safer, more convenient ways for members to access their money,” says Natalie Baker, vice president of marketing at Dominion.
In the fall of 2011, Dominion managed a soft rollout of the RFID product to its employees and their families. This enabled the credit union staff to familiarize themselves with the card’s functioning and prepared them to assist members with the transfer. In April 2012, Dominion began introducing RFID to its members.
Instead of mass issuing the cards without warning, the credit union started with a dynamic marketing campaign to promote the cards’ benefits.
“The response so far has been higher than expected in a very short amount of time,” Baker says. After just two weeks, 165 members are now using the contactless debit cards. The cards are perfect for small cash transactions and typically speed up checkout time by an average of 20%.
RFID technology by itself is currently less expensive than EMV technology, and beyond initial costs, the only additional expenses were materials and new bank identification numbers for the cards, says Kris Morelli, vice president of information technology at Dominion. On the downside, RFID can be less secure than a full EMV solution and can be intercepted at greater distances.
The reason Dominion went with RFID technology was primarily because of the slow transition toward EMV in the U.S. Not many terminals are currently set up to accept EMV chip cards, but there is a push to have contactless capabilities at terminals.
“It’s a great way to introduce our members to different ways to pay and to prepare them for the mobile payment movement,” Baker says. “It will help members get used to tapping instead of swiping.”
EMV and the possibility of offering dual functionality cards is still on Dominion’s radar, but the credit union is waiting to see where the industry is headed and where its members want to be before moving forward.
“We believe the writing is on the wall and all financial institutions will have to provide contactless solutions in the next few years,” says Morelli. With RFID, Dominion is already one step ahead.