Chip-based transactions at the point of sale totaled more than non-chip payments for the first time in 2018, just three years after the United States began in earnest to convert payment cards and point-of-sale devices to the EMV chip standard, according to the latest Federal Reserve Payments Study, released Thursday.
In-person chip-authenticated transactions on general-purpose cards totaled 48.8 billion last year, according to the Fed, far exceeding the 37.3 billion transactions performed without a chip. That’s up from just 1.4 billion in 2015. It was in October of that year that the card networks began to enforce the EMV standard. As of last year, chip-based transactions accounted for fully 57% of all in-person general-purpose card payments, up from 42% in 2017, the Fed data indicate
While the law of large numbers may be catching up, chip-authenticated transactions are still on a steep upward trajectory. They increased 43% last year, following a 233% rise in 2017 to 34.2 billion.
As for value, chip transactions totaled $2.15 trillion in 2018, up 32% from 2017. That was 65% of the total dollars transacted. The average value of chip-authenticated in-person card payments last year was $44, compared to $31 for transactions without chip authentication, the data indicate.
While chip-based credit transactions usually don’t require PIN entry, the Fed found that 17.8 billion in-person card payments involved both chip and PIN, ostensibly from debit cards. That came to 20.7% of all in-person card transactions, up from “a negligible percent” in 2015, according to the study.
The EMV and PIN results are part of the latest in a series of triennial reports from the Fed that seek to quantify the market size for ATM transactions, checks, and automated clearing house payments as well as general purpose cards. Overall, the Fed found that the number of non-cash payments totaled 174.2 billion last year, the result of a 6.7% average annual growth rate since 2015. That represents an acceleration from the 5.1% annual growth rate the Fed calculated for the three years from 2012 to 2015.