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The DCV Card |
NEWS |
This second edition of our ABI Insight coverage of next-generation powered payment cards will take a closer look into the dynamic card verification (DCV) card variant, outlining some of the market challenges and drivers as well as providing commentary pertaining to ABI Research’s forecast expectations.
DCV Card Drivers and Inhibitors |
IMPACT |
DCV Card Drivers
DCV Card Inhibitors
ABI Research’s Regional DCV Card Expectations |
COMMENTARY |
Driven by Gemalto and IDEMIA, previously OT-Morpho, it should come as no surprise that France is currently leading the way in DCV trials/pilots and Europe as a whole will likely adopt and move to DVC first. Successful trials in France will likely proliferate in pilots in other mature payment markets, including the United Kingdom, Germany, Spain, and Italy, with the European region becoming the test bed and real-life case study for other regions to monitor.
North America will likely lag behind in terms of DCV card adoption, with near-term activity limited to Canada as the United States continues to focus efforts on EMV migration. However, looking further forward, North America may favor adoption of the DCV next-generation card variant over the biometric sensor cards; the United States and Canada are largely against biometric capture and storage (although mobile applications may have somewhat eased resistance). But as a whole, citizens may feel uneasy giving or allowing a bank to secure their biometric data.
There will be little appetite in emerging regions, which are still fleshing out and expanding e-commerce availability and capabilities, although they may look toward DCV cards once more established on the e-commerce stage, using them as a platform from which to combat rising CNP fraud rates. It is ABI Research’s opinion that the DCV card is a technology designed for mature and established payment markets, where e-commerce and thus CNP digital transactions are a part of everyday life. ABI Research believes that initial issuance will reside in Western Europe and a select number of Asian countries, including Australia, South Korea, and Japan.
DCV cards have a specific payment-focused use case and are designed to solve a specific problem (that of increasing CNP fraud). Therefore, ABI Research believes that DCV cards will be the most popular next-generation powered payment card issued by 2022. In addition, DCV cards are lower cost than other powered card variants, including the biometric sensor card, with a price point of between US$10 to US$15 per unit. Issuers will be able to calculate an ROI far easier, due to the DCV card’s specific use case, to help combat CNP fraud rates, and thus justify investment into the higher-end DCV card proposition.
This ABI Insight provides a snapshot into the recently released ABI Research report Next-Generation Powered Payment Card Technologies (AN-2774), which also includes analysis of biometric sensor cards, next-generation powered payment card business models, and other end-market opportunities.