TCF Makes Dual Interface Its Standard EMV Debit Card Offering

In a break from the practice of most EMV chip card issuers, TCF National Bank reported this month that it will be issuing all of its customers’ debit cards with both contact and contactless capabilities.

The bank, the principal subsidiary of Wayzata, Minn.-based TCF Financial Corp., said it will begin mailing the dual-interface cards to customers before month’s end. Customers also can get instantly issued EMV debit cards in TCF branches.

Few other financial institutions have committed to dual-interface EMV cards yet, primarily because they can cost up to twice as much as a contact-only card that the customer inserts into a chip card reader—$2 for a dual-interface card compared with $1 for a contact-only EMV, says card maker CPI Card Group Inc. But, primarily with mobile payments based on near field communication (NFC), a contactless radio technology, in mind, a growing number of merchants are turning on the latent NFC capabilities found in most EMV point-of-sale terminals. MasterCard Inc. recently estimated the number of EMV-accepting merchants that also accept contactless payments at 560,000.

Contactless transactions require just a quick tap by a card or smart phone on the reader and are especially useful for high-throughput merchants such as quick-service restaurants and public-transportation providers where speedy transactions are essential. In contrast, contact-only chip cards have drawn fire for slow transaction speeds, or at least the perception thereof.

“We wanted to create the best customer experience possible,” a TCF spokesperson tells Digital Transactions News by email. “Chip-enabled debit cards with contactless pay allow consumers to make purchases more quickly and more securely at payment terminals, while still providing the same convenient access to cash and purchases.”

The spokesperson also says a lost or stolen TCF debit card can be instantly re-issued in a branch in a matter of minutes. “These benefits align to our commitment to being in rhythm with our customers’ everyday lives,” he says.

The spokesperson wouldn’t say how many debit card holders TCF has, but the company, citing reports from Visa Inc., calls itself the 17th-largest Visa debit card issuer. TCF for years has built its card business around a Visa-branded debit portfolio and does not issue credit cards.

Just one of a number of large card issuers interviewed earlier this year by Aite Group LLC had moved to dual-interface cards, and no others had plans to do so, says Julie Conroy, research director at the Boston-based firm. Citing confidentiality, she would not identify the one issuer.

“Merchant acceptance, or lack thereof, was one concern, and most said they were choosing to focus their contactless strategy on mobile,” Conroy tells Digital Transactions News by email. “I could see how this could make a great point of differentiation for TCF, however, as many consumers are frustrated with the longer time to process the chip transaction.”

TMG, a Des Moines, Iowa-based credit-union service organization formerly known as The Members Group, has reported that most of its members, in order to differentiate themselves, are choosing to issue dual-interface credit cards as they convert their portfolios to EMV.

Littleton, Colo.-based CPI expects more issuers to be ordering dual-interface cards as the EMV conversion continues, even though demand for such cards currently is low.

“We continue to have discussions with issuers about dual-interface cards, and are supplying a small number of dual-interface cards to a handful of U.S. issuers,” president and chief executive Steve Montross said at CPI’s second-quarter earnings conference call Aug. 10.

Montross added that as the first waves of EMV cards issued in 2014 and 2015 come up for re-issuance next year and afterward, “dual-interface cards will be a relevant re-issuance option for those issuers,” he said, according to a call transcript from Thomson Reuters StreetEvents.