Demand for Dual-Interface Cards Contributes To Big U.S. Growth at CPI Card Group

Boosted in part by growing card-issuer demand for chip cards that support both contact and contactless payments, card manufacturer CPI Card Group Inc. on Thursday reported a 32% first-quarter increase in sales of U.S. credit and debit cards.

Littleton, Colo.-based CPI didn’t specify how much dual-interface cards, which can handle both contact EMV chip card payments as well as contactless EMV transactions using near-field communication technology, contributed to the growth. But the company cited dual interface as well as demand for contact-only EMV cards, card personalization, and higher sales of its Card@Once instant-issuance product as factors behind the increase.

“We believe the EMV renewal cycle and the gradual conversion of dual interface contributed to our volume increase,” chief financial officer John D. Lowe said on a Thursday conference call with analysts to review the quarterly results, according to a Thomson Reuters StreetEvents transcript. “Card@Once growth also contributed to the strong first quarter.”

Payment industry analysts and executives say the U.S. is a prime new market for contactless cards because of the spread of EMV point-of-sale terminals equipped to handle NFC transactions, and growing issuer demand for fast contactless payments as the first generation of EMV contact-only chip cards comes up for replacement. The conversion to dual interface, however, has been slow, in part because such cards cost more than contact-only cards. But some leading issuers, including JPMorgan Chase & Co., have announced commitments to dual-interface plastic.

CPI Card Group’s net U.S. credit and debit card sales totaled $48.9 million versus $37.1 million in 2018’s first quarter. Sales in the U.S. prepaid card segment grew 8% to $16.7 million.

CPI posted total sales of $66.9 million, a 22% increase from $54.9 million a year earlier. The company’s first-quarter net loss narrowed to $3.06 million from last year’s $7.29 million loss.