Following on from the broad agreement relating to the Dankort in 2013, the first important step has now been taken to further develop it in line with the opportunities and expectations that exist for a modern payment card. Beginning in the third quarter of 2015, all new Dankort and Visa/Dankort cards will be issued with contactless functionality to enable low-value purchases of up to DKK 200 to be made without entering a PIN. Existing cards will be replaced as and when they expire.
"This agreement represents an important step into the future for the Dankort in terms of remaining a strong and preferred payment option for people in Denmark. This really matters to the Danish public, and it is important to the retail trade, too," according to Henrik Hyltoft, Market Director of the Danish Chamber of Commerce.
A state-of-the-art Dankort
The Dankort is the most widely used and least expensive national payment card and, according to the Dankort agreement entered into in 2013, the card is to be state-of-the-art in terms of technology, keeping up with technological developments, market requirements and what consumers want from a modern payment card. This is the first important milestone on that journey:
"The Dankort has embarked on a journey of development and new opportunities. We hope this journey will continue so the Dankort can remain inexpensive, straightforward and effective while gradually moving into a more digital world," according to Bo Nilsson, CEO of Nets.
Building on this, the banks add: "The Dankort is an important part of Danish payment infrastructure; we support it and we are pleased to note that it is developing in line with today's new opportunities and market requirements," according to Niels Skylvad of Sydbank, one of the banks represented in the partner forum.
Contactless payment with no need to enter a PIN for small transaction amounts will speed up serving times, give consumers added convenience and generally make payment cards an even stronger alternative to cash, which many people currently prefer when paying small amounts. The fact that more people will be paying by card instead of in cash will reduce payment handling costs – thus benefiting society as a whole.
About contactless payments
Contactless payments can be made without the payment card being physically read/being in contact with the chip reader. The card simply needs to be swiped across the scanner (within one centimetre) in order to be read. Small payments – which is expected to mean payments under DKK 200 – made with the Dankort will not require the use of a PIN. This will reduce the serving time required for each payment. A contactless card can still be used in the "conventional" way, i.e. with the chip being physically read in terminals not equipped with a contactless reader.
The term Near Field Communication (NFC) is frequently used when talking about contactless payments. However, NFC is a protocol that enables payments by mobile phone, and not physical payment cards for contactless use.