The launch of chip-embedded combo cards that combine multiple functions on one integrated-circuit (IC) chip has turned into a battle between two international credit card issuers, MasterCard and Visa.
"We believe the adoption of the new IC standard that allow multiple applications will lead to a shake-up in the industry," said Tina Chiang (江威娜), vice president and business manager of Greater China, MasterCard International, at a luncheon yesterday.
Emphasizing the benefits of saving banks costs and customers trouble by adopting an IC system, Chiang said a government ruling last October has been the main driving force to push the conversion forward.
The government has required 64 million magnetic cards in circulation to be converted into more secure IC cards by June, to resolve the increasingly severe problems of card fraud.
An industry official said the transition stage might drag on even longer, given the difficulty of luring back magnetic cardholders for the conversion.
"I think the project won't be completed until next year," said Tim Hung (
In a bid to lead the market, MasterCard cooperated in January with Taiwan Cooperative Bank (合作金庫) and the Land Bank of Taiwan (土地銀行) to launch the first chip combo cards, which integrate six functions -- cash withdrawal, credit, cash advances, smart debit, Cirrus (cash-withdrawal abroad), Mondex (stored value) and fraud prevention -- on one card, according to Chiang.
The two banks plan to issue, respectively, 1 million and 500,000 MasterCard chip combo cards by the end of the year.
Chiang said, enhanced by multiple applications, the cards require lower acquisition costs and can achieve higher acquisition and activation rates, thereby bringing in higher revenues for banks.
"We expect, by the second quarter, a total of 13 banks joining the fold" to launch these cards, said Shuan Ghaidan, vice president and regional head of Advanced Payment Systems of MasterCard.
Its major rival, Visa International, has also worked with eight banks to launch chip combo cards that integrate ATM with credit or debit functions.
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