Savantor MarketEye: August 1 - 16 2007 Savantor Limited 68 Lombard St London EC3V 9LJ This is a confidential, high-level industry news and business intelligence Tel: 0870 734 6250 Fax: 0870 734 6251 update bulletin. For further information on any of the items contained email: [email protected] within the bulletin or to discuss the potential impact of these items on www.savantor.com your business, please contact Savantor on our dedicated support centre e-mail address ([email protected]). Click on the Savantor links below for more information about us and our opinions: Articles Press releases How we work Resource fulfilment Items in this issue: Russia's largest credit card acquirer UCS to boycott Savantor’s Views.....................................................1 AmEx................................................................................ 4 Products and Initiatives..........................................1 China Card system hits half-year milestone..................... 4 Lloyds TSB opens bilingual call centre for Polish Paper authentication and ID fraud.................................... 4 migrants ........................................................................... 1 Supermarkets pose threat to bank current account base. 5 Citi launches drive-through ATM in China ....................... 2 One in ten bank branches closed since 2002 .................. 5 Nationwide launches new ATM:ad campaign .................. 2 Pressure on UK government to introduce bank data UK banks use passport validation service ....................... 2 security law....................................................................... 5 Competition for PayPal .................................................... 2 Faster Payments to arrive six months late ....................... 5 Coming to a Coke Machine near you soon...................... 3 UK consumers not concerned by Web fraud.................... 5 Habib Bank launches pre-paid card in UK ....................... 3 Outsourcing, Acquisitions and Deals....................6 Royal Bank of Scotland introduces m-banking service.... 3 First Data International completes acquisition of Morgan Stanley opens carbon bank ................................ 3 POLCARD ........................................................................ 6 Co-operative group stores expand POS functionality ...... 3 Capital One to buy prepaid card firm NetSpend............... 6 Market News and Views..........................................4 FreeStar Technology enters into agreement with Chinese e Payments provider .......................................... 6 Savantor’s Views At a time when the UK card market is busy with issuing the second generation of chip and PIN cards as well as launching contactless and prepaid cards now may be a good time for issuers to take a step back and consider their transaction policies. Many such strategies, particularly chip settings on Issuer Action Codes, LCOL and UCOL etc were put in place several years ago and may not have been revised since. This is probably resulting in many transactions being declined for no good reason and resulting in loss of revenue for issuers. As well as looking to update these strategies Issuers need to look ahead to the imminent use of contactless and not too distant use of NFC and have suitable governance in place to regularly review their strategies to take best advantage of these new technologies. Savantor were involved in a review of these strategies recently for a major UK bank resulting in considerable cost savings, so why not call us and see how we can help you realise similar savings whilst also positioning you for the future. Products and Initiatives Lloyds TSB opens bilingual call centre for Polish migrants Lloyds TSB has launched a new fast track account opening service for Poles planning to move to the UK. The new service will allow potential customers to set up a bank account by making one free phone call before they even leave Poland. A special call centre operated by Polish speaking consultants has been set up, so all the Polish migrant has to do is call Lloyds TSB to get an account number and schedule a meeting at a chosen Lloyds TSB branch to complete the formalities. To raise awareness about the new call centre, Lloyds TSB has launched a local advertising campaign in Poland. In the past 12 months Lloyds TSB has launched a range of initiatives to meet Registeredthe growing in England No. 3420260demands of Registered office: 8/10 South Street, Epsom, Surrey KT18 7PF VAT Registered No. 689136196 Whilst Savantor Limited (“Savantor”) has used reasonable efforts to obtain information from sources which it believes to be reliable it does not make any representations or give any warranties or guarantees that the information provided or any opinions expressed herein are accurate, reliable or complete and none should be relied upon as statements of fact. In no event, including (without limitation) negligence, and in no circumstances will Savantor be liable for any loss or damage of any kind whatsoever, including (without limitation) any direct, special indirect or consequential damages, caused by the use of or reliance upon information provided or opinions expressed herein. Savantor · Confidential 1 Savantor MarketEye: August 1 - 16 2007 the Polish community. At the beginning of the year, it opened the UK's first international banking store, which specialises in serving customers from overseas. It has also recruited over 180 fluent Polish speakers in branches across the UK. (Source date: 1st August, 2007) Citi launches drive-through ATM in China Citibank says it has become the first bank to provide a drive-through ATM in China after unveiling a new machine in the upper-east area of Beijing. Under Chinese regulations the ATM - along with Citi's 94 other cash machines in the country - can only be used by customers holding cards issued outside of China. Citi says it intends to make its cash machine network available to local residents holding debit rd cards issued in China if and when the rules change. (Source date: 3 August, 2007) Nationwide launches new ATM:ad campaign Nationwide Building Society is using the ATM:ad system to run a campaign promoting its new 'Sponsored by You' initiative which gives Nationwide customers the opportunity to see their child help lead out the national team, see their name displayed on perimeter advertising boards, receive tickets to international football matches, enjoy VIP hospitality packages, watch exclusive team training sessions together with many other 'money can't buy' opportunities. The ATM:ad campaign features across 697 through-the-wall cash machines at Nationwide Building Society branches, in a campaign that kicked off for a week in July and is running again from 30 July - 12 August. (Source date: 3rd August, 2007) UK banks use passport validation service UK Financial Services firms are using a passport validation service to screen and security check their customers. Reports first appeared in 2005 that the UK's passport office was working with Abbey and HSBC to set up a service that will enable banks to cross-reference passport details with information held in the passport database. Although the Data Protection Act prevents the passport service handing out data, banks are now able to use a call centre to check passport details provided by customers. The service has now been running for one year and has been a success. Firms regulated by the Financial Services Authority (FSA) are able check and validate passports provided by customers by calling a special hotline. In one case, a check on a customer applying for a business loan from a bank showed the passport had been forged, even though the customer had passed other checks. Several arrests have been made and 211 forged or stolen passports have been seized, he adds. (Source date: 6th August, 2007) Competition for PayPal There are potential competitors to PayPal emerging in the form of Google's Checkout system and now Amazon have launched their Flexible Payment Services, a complete set of API's for developers to integrate payments functionality. Key features include: • Send and receive money using credit card, bank account or Amazon Payments balance transfer as payment methods. • Create 'Payment Instructions' to define conditions and constraints desired for a given transaction, and programmatically obtain payment authorizations or 'tokens' that represent these Payment Instructions from customers. • Execute one-time, multiple, or recurring payments on behalf of customers. • Aggregate micro-transactions into a single larger transaction using Prepaid and Postpaid capabilities. • Build payment applications where you are neither the sender nor the recipient of funds. You can build marketplace applications that enable the movement of money between two third parties. • View account balances, transaction histories, and transaction details online • Utilize the Amazon FPS sandbox to build and test applications without using real money or incurring any transaction charges. (Source date: 6th August, 2007) SavantorSavantor Ltd. · Confidential Confidential Page 2 2 Savantor MarketEye: August 1 - 16 2007 Coming to a Coke Machine near you soon. On the basis that what happens in the US happens in the UK soon afterwards it is worth noting that MasterCard Worldwide and USA Technologies have announced the installation of a number of cashless payment terminals into Coca-Cola Enterprises vending machines. Coca-Cola Enterprises Inc. will install the new terminals in selected