The Regional Cards Utility gives banks and other credit providers access to the latest technology and business systems under an innovative shared service model.

EDS Australia managing director Chris Mitchell said EDS has made a significant investment on developing an Agile Card Framework, the software infrastructure that drives the new service.

"The regulation of interchange fees by the Reserve Bank has opened up the payment card market and placed pressure on financial institutions to remain competitive," Mr. Mitchell said. "Our utility provides card processing for multiple institutions, driving down costs by up to 50 per cent and allowing them to deliver new customer services that are quite separate and unique. We're offering payment & card providers the latest technology, vastly improved economies of scale and rapid time to market for new products."

The Regional Cards Utility currently processes in excess of 70 million transactions per month across both issued and acquired transactions. The infrastructure developed by EDS has an initial capacity to process 10-15 million card accounts.

Dee McGrath, the former general manager of consumer and commercial cards at National Australia Bank, has been appointed by EDS as director of the new utility for both Australia and New Zealand.

She said EDS was offering a card-processing environment that uses the latest technological and operational approaches, something that few companies could achieve in isolation without huge up-front fixed costs.

"Products such as pre-paid, scheme debit and chip cards are driving unprecedented growth in micro and online payments, an area in which large banks are struggling to maintain a competitive edge," she said. "Banks need modern IT platforms that can accommodate higher volumes and an ability to introduce new products. Future success will hinge on operational efficiencies, but many of the IT systems banks use for processing payment cards have remained unchanged for 20 years."

As a result the industry is under increasing pressure from overseas entrants who can offer customers a more flexible and innovative service. There is also a shift in the balance of power at the merchant end of the market, with demands for greater choice, tailored services and differentiated pricing.

"Merchants now have the ability to choose from new entrants with deep pockets and new technologies which is typically delivered at a lower price," Ms. McGrath said. "The changing payment card environment will make it increasingly attractive for banks to outsource the management and processing of their card products and merchant transactions."

The technology and business service model introduced by EDS allows financial institutions to transform payment card services and re-engineer back office processes without the normal associated risks.

"It's a seamless environment for customers, with banks able to promote and protect their own brand and unique services," said Vinnie Calo, director, global card services at EDS. "Our experience, both regionally and globally, will continue to deepen as we roll out the EDS Regional Cards Utility to other areas."