(Bloomberg) -- Wells Fargo & Co. is joining rivals including Bank of America Corp. and JPMorgan Chase & Co. in adopting tap-to-pay technology for its credit and debit cards.
Starting this week, all new Wells Fargo credit cards will be issued with the contactless technology, which allows users to tap their cards at the point of sale instead of swiping or inserting them, the San Francisco-based bank said in a statement. It will add the technology to its debit cards beginning this summer.
Banks stand to boost earnings by $2.4 billion and cut expenses by $22.2 billion by transitioning to contactless-card technology, researchers at A.T. Kearney said in a report based on data provided by Visa Inc. That’s because contactless card transactions often replace cash, which remains the most common payment method in the nation, representing 30 percent of all transactions, according to the Federal Reserve.
“We believe customers will adopt this as an alternative to cash that is both simple and secure,” Ed Kadletz, head of Wells Fargo’s deposit products group, said in the statement. “We are excited to offer our customers -- who use their Wells Fargo debit card more than 8.8 billion times per year -- a new payment option that they can use at a growing number of merchants.”
Banks are equipping their credit and debit card portfolios with the tap-to-pay technology as transit systems around the country prepare to accept such cards. Starting this year, New York’s Metropolitan Transit Authority will begin transitioning away from MetroCards as it introduces a new payment system that allows riders to tap their credit or debit card at turnstiles.
Wells Fargo, the fourth-largest U.S. bank, launched an external search for a new chief executive officer after Tim Sloan abruptly stepped down last week. He’ll be replaced on an interim basis by the firm’s general counsel, C. Allen Parker.
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