ST. PETERSBURG, Fla. — PSCU Financial Services, a cardprocessing CUSO for more than 500 credit unions that process cardson the First Data Corp. platform, has announced that it is thefirst CUSO to launch contactless cards for credit and debitplatforms.

PSCU's member-owners can begin offering the new cards, which areavailable with Visa and MasterCard contactless card technology.

The initial market for the innovative cards is smalltransactions at time-sensitive locations such as fast food outlets,convenience stores, gas stations and movie theaters. Withcontactless technology, cardholders and merchants save time sincethe card just needs to be held within two to four inches from theterminal. There is no need to position a card so that the magneticstripe can be read since a computer chip in the card securelycommunicates the necessary information. The card also offers anextra layer of security thanks to its use of dynamic cardverification.

Initial data from MasterCard research shows an average 30%increase in purchases, a 19% increase in transaction volume and a17% growth in activation rates at pilot sites where contactlesscards were offered to inactive cardholders.

“Contactless cards are a great way for credit unions todifferentiate their card offering and appeal to younger members andmembers of all ages who are interested in using the latest paymenttechnology. It also offers significant time savings to bothcardholders and retailers,” said David J. Serlo, CEO, PSCUFinancial Services.

Several member-owner credit unions were pilot sites for PSCUFinancial Service's new contactless cards. Altra Federal CreditUnion of LaCrosse, Wis., was eager to market this hot newtechnology to its student members in this college town of about52,000. The credit union also created a new graphic for itscontactless cards.

“Our young members are always eager to use new technology thatsaves time and looks sharp. Our contactless cards boast the latestin technology along with a new eye-catching design. It's stillearly, but this new card has been very well-received among ourmembers,” said Mary Isaacs, chief financial officer at AltraFederal Credit Union.

Issuance costs are higher than traditional cards because of theembedded chip, but that expense is offset by increased usage thatmay result in an incremental lift in interchange revenue, PSCUsaid. Contactless transactions are processed as signature accounts,although no signature or receipt is required for transactions under$25.