Observers of the U.S. payments market who have been expecting a surge in conversions to dual-interface cards may have been disappointed Wednesday morning as CPI Card Group Inc., one of the nation’s biggest card manufacturers, said it expects “dual interface to grow gradually as a proportion of the U.S. market” in 2019.

The prediction, which CPI Card Group officials stated during a brief call to discuss the company’s fourth-quarter and full-year 2018 financial performance, is one of the earliest indications of how the industry that produces payment cards sees demand from financial institutions and other issuers.

With the nation having largely converted to EMV chip cards, observers are awaiting the widespread introduction of cards that can function with tap-and-go capability as well as be inserted into chip card readers. The speed and convenience of contactless transactions, they hope, will make EMV transactions more appealing to consumers and merchants.

Despite its cautious prediction for dual-interface cards, the Littleton, Colo.-based company said it expects the total U.S. card-manufacturing market to grow this year, due in part to reissuance of EMV cards and in part to growth, however modest, in dual-interface plastic. One hopeful sign for dual-interface was JPMorgan Chase & Co.’s announcement in November that it intends to add contactless technology to its EMV portfolio throughout 2019.

CPI Card Group narrowed its net loss from continuing operations in the fourth quarter to $7.2 million from $14.4 million in the same quarter in 2017. Total net sales rose 19% to $68.5 million. For the whole of 2018, sales totaled $255.8 million, up 14.3%, while the net loss from continuing operations fell to $14.8 million from $23.1 million in 2017.

Despite the improved performance, the company’s shares were down slightly in action on the Nasdaq Capital Markets, trading at $3.76 a share at mid-morning.

In other contactless card news, one research firm predicts the cards could displace cash, a long-sought-after goal of the card brands.

GlobalData plc, a London-based research firm, says the impending mass issuance of dual-interface cards, with contact and contactless payment capability, could lead to decreased cash use. Though the firm did not say when this might happen, it says U.S. consumer fondness for using cards could accelerate the shift.

“Contactless cards have been a comparative rarity in the U.S. until now,” Bhavika Shah, GlobalData associate banking analyst, said in a statement. “The reason for this is that U.S. banks are finally making serious moves to deploy contactless cards to the mass market, with JPMorgan Chase, Capital One, and Citigroup introducing more than 100 million contactless credit and debit cards in the U.S. in 2019.”

Contactless card payments are likely to be adopted by U.S. consumers because paying with a card dominates the point-of-sale in stores.

Forty percent of U.S. consumers choose a credit card when paying in a store and 35% choose a debit card, found a Worldpay report in November.

“The U.K.’s contactless boom was initially driven by contactless cards becoming available for use on public transport, most notably the London Underground,” GlobalData says. “If we see New York or other major U.S. cities accept contactless cards on their own transport systems, this is likely to accelerate consumer adoption and usage of this technology, which could eventually lead to the U.S. becoming a cashless society.”

—With additional reporting by Kevin Woodward