Dual Interface Chip Card: What it Means, How it Works

What Is a Dual Interface Chip Card?

A dual interface chip card is a credit or debit card with a single embedded chip that allows the card to be used in both contact and contactless transactions. The “contactless” part means it has an RFID or NFC chip that enables it to obtain the card’s identifying information and make payments through radio-frequency identification (RFID) or near-field communication (NFC) technologies. The “contact” part means it can be used with physical readers, either via a traditional magnetic stripe or because the chip can be dipped into an EMV reader.

How a Dual Interface Chip Card Works

Credit and debit cards have traditionally required a user to swipe the card through an electronic terminal. This allows the terminal to read the magnetic strip on the back of the card, which contains identifying information about the account.

The dual interface chip card is a type of smart card with an embedded chip that can facilitate both contact and contactless transactions (aka tap-and-pay). Equipped with a hidden antenna, a contactless card allows users to wave their card in front of a reader to pay for an item.

The credit card number and user’s name and expiration date are still contained on the face (or increasingly, the back) of the card, and an EMV chip (Europay, MasterCard, and Visa chip) may still be included, to provide added security in transactions. Overall, having a contactless chip and/or an EMV chip, and a magnetic strip allows the cardholder to complete transactions on a wider variety of machines in a highly secure manner.

Contactless chip cards allow identifying information to be easily read by a sensor. Contactless terminals are commonly used by employees who have identification badges that must be tapped or waved past a sensor in order to gain access to a building or room.

Merchants that want to take advantage of dual interface chip cards must upgrade their card terminal so that it can accept both contact and contactless chip cards. Many merchants have upgraded their terminals to allow for contactless payment transactions because they are faster and can help decrease waiting times for stores with high volumes of transactions.

Dual interface chip cards provide greater payment processing convenience. They can be used with both contact and contactless payment terminals. Many card issuers are now producing dual interface chip cards for their customers and phasing out ones with older technology. Terminals have added new chip functionality and also begun to allow for both chip transactions and contactless transactions.

Special Considerations

Dual interface chip cards are being produced by more issuers as technology advances across the industry. Many issuers have begun to issue these cards, which make the checkout process much faster with merchants, as they can be used with both contact and contactless payment terminals and handheld devices.

While dual interface chip cards are becoming more popular, their added costs are one reason they were slow to take off. Dual interface cards generally cost approximately twice as much to produce as a chip card. While high volume production helps to keep manufacturing costs down, the added cost was a consideration—at least, until 2020.

Last year saw increased demand for contactless connectivity, as World Health Organization (WHO) and governments across the world advocated the use of smart cards to support social distancing recommendations when conducting point of sale purchases.