ST. PETERSBURG, Fla. -- PSCU Financial Services, a card processing CUSO for more than 500 credit unions that process cards on the First Data Corp. platform, has announced that it is the first CUSO to launch contactless cards for credit and debit platforms.
PSCU's member-owners can begin offering the new cards, which are available with Visa and MasterCard contactless card technology.
The initial market for the innovative cards is small transactions at time-sensitive locations such as fast food outlets, convenience stores, gas stations and movie theaters. With contactless technology, cardholders and merchants save time since the card just needs to be held within two to four inches from the terminal. There is no need to position a card so that the magnetic stripe can be read since a computer chip in the card securely communicates the necessary information. The card also offers an extra layer of security thanks to its use of dynamic card verification.
Initial data from MasterCard research shows an average 30% increase in purchases, a 19% increase in transaction volume and a 17% growth in activation rates at pilot sites where contactless cards were offered to inactive cardholders.
"Contactless cards are a great way for credit unions to differentiate their card offering and appeal to younger members and members of all ages who are interested in using the latest payment technology. It also offers significant time savings to both cardholders and retailers," said David J. Serlo, CEO, PSCU Financial Services.
Several member-owner credit unions were pilot sites for PSCU Financial Service's new contactless cards. Altra Federal Credit Union of LaCrosse, Wis., was eager to market this hot new technology to its student members in this college town of about 52,000. The credit union also created a new graphic for its contactless cards.
"Our young members are always eager to use new technology that saves time and looks sharp. Our contactless cards boast the latest in technology along with a new eye-catching design. It's still early, but this new card has been very well-received among our members," said Mary Isaacs, chief financial officer at Altra Federal Credit Union.
Issuance costs are higher than traditional cards because of the embedded chip, but that expense is offset by increased usage that may result in an incremental lift in interchange revenue, PSCU said. Contactless transactions are processed as signature accounts, although no signature or receipt is required for transactions under $25.