Barclaycard Merchant Services is looking to switch more high street card transactions offline and introduce enhanced credit control procedures in an effort to maximise the return from its investment in EMV and Chip and PIN.
BMS worked with incumbent supplier ACI Worldwide to prepare for the Chip and PIN trial in Northampton ahead of the UK's national roll out of EMV chip cards by end-2004. The UK bank supplied over 30% of all bank-owned retailer terminals in the town trial.
Speaking to a packed conference session at Finextra's retail financial technology show Finexpo today, Nigel Mapletoft, senior project manager for BMS, described the back-end migration effort as one of the most successful projects ever undertaken by Barclaycard.
The new transaction infrastructure utilises ACI's Base24 software to authenticate, authorise and route transactions over a HP NonStop server. On Saturday, the server handled 6.5 million transactions, says Mapletoft, a figure which is expected to rise to 9 million transactions - or 750 transactions per second - on 23 December as last-minute Christmas shoppers hit the high street.
Mapletoft says the scalability of the system allows BMS to confidently support the increased complexity of the processes inherent in EMV chip cards, which transmit four times the data contained on traditional mag-stripe cards.
BMS is currently preparing for full-scale roll-out of some 500 terminals per day in readiness for the national switch-over to EMV.
"Our roll-out programme will take some 15 months to complete," says Mapletoft. "During this time we will work closely with ACI to ensure that we have capacity to handle the increased volume of chip transactions."
Speaking from the same platform, Caroline Walpole, senior business consultant, ACI Worldwide, outlined the opportunities available to BMS and other banks from the move to EMV and Chip and PIN. "It will be possible to switch more traffic offline in a risk averse way because you know fraud is contained," she says.
As a result, banks can confidently take on higher risk merchants and deploy terminals in outlying areas where telecomms are less reliable. EMV offline operation will additionally enable banks to balance peak load times during volume spikes.
In the credit management arena, pre-authorised offline debit accounts enabled via EMV will provide banks with a means to reduce bad debt provisions on their books. The lower incidence of fraud will also help reduce back office operational costs as dispute resolution issues recede.
To take advantage of the enhanced risk management environment and maximise credit control procedures, however, banks will need to be proactive and dynamic in their management of card parameters, says Walpole, with a subsequent knock-on effect to card management systems, behavioural scoring and fraud detection.
Longer-term, the introduction of new applications, such as PKI, e-ID, loyalty and ticketing, also offer opportunities to share infrastructure costs with partner organisations and to market to new customers.
The migration to EMV, and associated payments and security issues featured prominently in the speaker sessions at Finexpo, which by mid-afternoon had pulled in over 200 delegates. Early feedback from delegates suggests the conference presentations and associated exhibition had provided an invaluable insight into the key technology and business issues currently confronting retail financial services firms.
And finally, on a more prosaic note, Finextra is pleased to confirm the names of the five lucky winners in our exclusive prize draw for a Pure Evoke-1 DAB digital radio:
Mark Bradley, Bradford & Bingley
Robin Ager, Cheltenham & Gloucester
Paul Nunn, Egg
Craig Carter, Intelligent Finance
Steve Lawrence, Lloyds TSB
The radios can be picked up at the Finextra stand at Finexpo or by e-mailing firstname.lastname@example.org with delivery details.