KAWARTHA LAKES-The Smart Payment Association (SPA) says there is an increasing risk in payment card availability, caused by global shortages of chips.
Payment cards are essential for everyday life and business. Nearly 90% of non-cash consumer payments are made using cards in physical stores and payment cards are also critical for accessing cash. In addition, 40-60% of online payments are supported directly or indirectly (via digital wallets) by payment cards.
Securing an uninterrupted supply chain for payment cards is therefore essential to daily life and commerce according to the SPA. As payment cards are issued upon opening a bank account, renewed regularly after their expiration date or replaced in an emergency when a card is lost or compromised, each year more than 3 billion EMV-standard-based payment cards need to be produced and delivered to consumers worldwide.
The SPA says the bottlenecks in chip supply have become so critical, that payment card manufacturers face increasing difficulties in obtaining chips needed to produce cards. That crisis is showing no sign of ending halfway through 2021 and will spread throughout 2022. The SPA foresees significant disruptions, in payment card production beyond the reasonable control of payment card manufacturers that will affect their ability to meet full demand.
The SPA has initiated actions with payment schemes, central banks and governments to obtain, from semiconductor foundries, higher priority on the production of chips needed for payment cards and to ensure their adequate supply. Officials are calling on government bodies as well as stakeholders in banking and payments to improve the situation to the benefit of consumers.
