PenFed Going to Contactless Payments
PenFed's leader says, "We're focusing on digital innovations and helping our members make purchases in the most convenient ways."
McLean, Virginia-based PenFed Credit Union has announced it will begin issuing contactless cards to members this month.
The credit union, which has $24 billion in assets and about 1.7 million members, said it plans to give the cards to members when their old cards come up for renewal or replacement.
Contactless cards transmit payment transaction data when they are within a few inches of an enabled point-of-sale terminal, eliminating the need to swipe or insert the card.
“The release of the contactless credit cards comes at a time when we’re focusing on digital innovations and helping our members make purchases in the most convenient ways,” PenFed President and CEO James Schenck said. “Visa has been a longtime partner of PenFed and we’re thrilled to collaborate with them on this new product rollout.”
The news comes at a time when many card issuers appear to be embracing the contactless card trend. Last fall, technology advisory firm ABI Research reported that over half of all payment cards issued in 2018 would be contactless and predicted that by 2022 issuers will pump 2.3 billion contactless cards per year into markets around the world. It attributed much of the growth to contactless-card migration in the United States, as well as in India, Southeast Asia and Latin America.
Several recent studies also suggest contactless card payments are growing rapidly among consumers in the United States and around the world.
Last summer, for example, fintech analysis firm Juniper Research projected that by 2020, 30% of in-store purchases will involve contactless payment cards and mobile wallets such as Apple Pay, Samsung Pay or Google Pay. It also estimated that in-store contactless payments will hit $2 trillion globally by 2020, representing 15% of total point-of-sale transaction value.
“Tapping to pay is becoming the standard way to checkout around the world, with more than 40% of all Visa in-store transactions outside of the U.S. occurring with a tap,” PenFed noted. “Merchants across the U.S. have already enabled contactless payments, with 70 of the top 100 merchants, by number of transactions, offering the ability to tap to pay at checkout.”
Other data suggested that many merchants have indeed started investing in contactless card acceptance. More than 50% of transactions now take place at merchants that have enabled contactless payments, according to the U.S. Payments Forum.