Savantor MarketEye: July 1 - 15 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: Voca and LINK merge and launch pan-European Savantor’s Views.....................................................1 clearing service................................................................. 3 Products and Initiatives..........................................1 Plastic spending rising in UK............................................ 3 Vue Cinema Gift Card launch .......................................... 1 Mobile operators call for banking reforms ........................ 3 Virgin Money to launch pre-paid MasterCard .................. 2 Oyster and Barclaycard OnePulse ................................... 4 Vodafone offers direct access to bank accounts via Outsourcing, Acquisitions and Deals....................5 MoniLink........................................................................... 2 Morgan Stanley completes Discover spin-off ................... 5 Market News and Views..........................................2 GE Money Bank signs Nordic agreement with EDB ........ 5 Visa becomes FIFA Partner............................................. 2 Nordea to implement Chip and PIN for online shopping .. 2 Swedbank acquires TAS-Kommerzbank.......................... 5 Savantor’s Views One of the articles in this edition mentions the use by Nordea of 2 factor authentication in online shopping rather than just for online banking. This is a first and we might expect that the UK would be showing more signs of rushing down this road too given that the latest research shows • total online spending has topped £10bn, while online revenues for retailers tipped four per cent of total retail spending - both for the first time. Online spending in the UK is predicted to reach £28.1bn by 2011. • card-not-present fraud losses have increased by 16 per cent in the last year and now account for just under 50% of all card fraud losses However movement in the UK market is slow with only Royal Bank of Scotland and Barclays deploying hand held readers for online banking log in. Nationwide Building Society plans to begin deploying card readers to its online customers later this year and Halifax is expected to select authentication technology and begin a roll out in the autumn. Lloyds TSB has shelved plans to deploy them to customers. HSBC says its existing monitoring procedures and customer education initiatives are already effective in detecting and preventing fraud. Along with HSBC, Abbey has also stated that it doesn't intend to issue two factor authentication technology to customers. The information on Nordea’s initiative doesn’t mention the costs of the devices but it may be something that UK customers are prepared to pay for given their concerns on online security and the fact that plastic spending has trebled in the last 10 years. Products and Initiatives Vue Cinema Gift Card launch Fifty-eight cinemas across the UK will offer Vue gift cards, which are useable towards the purchase of cinema tickets, refreshments or any other goods on sale at Vue cinemas. First Data International is managing the end-to-end gift card service, including processing and card procurement services to Registered in England No. 3420260 enable delivery of the new gift card programme. First Data's prepaid 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: July 1 - 15 - 30 2007 technology is fully integrated into Vue point of sale machines. (Source date: 1st July, 2007) Virgin Money to launch pre-paid MasterCard Virgin Money is to launch a pre-paid MasterCard in the UK this summer in association with e-money issuer PrePay Technologies. The Virgin Money pre-paid MasterCard card is not attached to any bank account and can be loaded with cash through 34,000 PayPoint and Post Office outlets across the UK and can also be topped up through wage transfers, credit or debit cards online and bank transfers. The programme has been under development since September last year and is supported by privately-held th PrePay Technologies through its 360money prepaid platform. (Source date: 4 July, 2007) Vodafone offers direct access to bank accounts via MoniLink Vodafone is to offer subscribers direct access to their finances through a link with the MoniLink mobile banking network. The service allows customers of MoniLink banks to check their balance, request a mini-statement and top-up their or their friends'/family's 'pay as you talk' mobile phones. The Monilink system has been set up by Monitise and VocaLink and has so far signed up HSBC, first direct, Alliance & Leicester, Royal Bank of Scotland, NatWest and Ulster Bank in Northern Ireland. Bank customers registering with the Vodafone Internet On Your Mobile home page are able to connect to their account using a secure application stored on their mobile. On accessing MoniLink, the customer is prompted to enter a unique passcode, registered with their bank or building society, before secure access is granted to their account. The service will be offered free-of-charge until the end of the year. (Source date: 9th July, 2007) Nordea to implement Chip and PIN for online shopping Nordea has contracted with Arcot Systems to support the implementation of Verified by Visa and MasterCard SecureCode with Chip and PIN authentication for customers shopping online. Nordea signed a deal with Swedish security vendor Todos Data System in June for the supply of over a million portable smart card readers for secure Internet banking. Arcot's TransFort system will additionally be used in conjunction with the bank-issued smart cards and readers to authenticate customers when paying online. The extension of the system to the card scheme's 3-D Secure shopping standard marks the first time a bank will use chip and PIN authentication for both online payment and banking. (Source date: 9th July, 2007) Tesco extends euro ATM roll out Tesco is to extend a trial of euro-dispensing cash machines to twenty sites following positive feedback from an initial pilot programme. Tesco says a six-month trial of four "euro ATMs", which were located near airports and international rail terminals, has been so successful that the decision has been made to extend the trial to 20 units in time for the summer holidays. The euro ATMs are free to use and located close to transport hubs across the UK. Royal Bank of Scotland is understood to be investigating the installation of similar euro cash machines at an undisclosed number of locations. (Source date: 11th July, 2007) Market News and Views Visa becomes FIFA Partner FIFA announced that Visa International has become the sixth FIFA Partner with worldwide rights to FIFA's competitions from 2007 to 2014. This sponsorship in the financial services category represents Visa’s most significant foray onto the international stage of football and they join adidas, Coca-Cola, Emirates Airline, Hyundai and Sony in the top tier of the world football governing body's new sponsorship structure that entitles six corporations to the highest level of commercial affiliation with FIFA over an eight-year period. Visa will enjoy core sponsorship rights to all FIFA competitions, including the 2010 FIFA World Cup South Africa™ and the 2014 FIFA World Cup™, as well as to FIFA's special st events and development initiatives. (Source date: 1 July, 2007) SavantorSavantor Ltd. · Confidential Confidential Page 2 2 Savantor MarketEye: July 1 - 15 - 30 2007 Voca and LINK merge and launch pan-European clearing service On the 2nd July the merger of Voca and LINK was completed. The new company, VocaLink, will provide domestic and international transaction services to banks and corporates. At the same time, VocaLink is launching Europe’s first independent pan-European payment service (€CSM) in partnership with 10 banks from across Europe. Member banks may be partners and clients simultaneously and can launch SEPA services from January 2008. Founder members include Bank of America, Citi, Dexia Bank, Fortis, Lloyds TSB, RBS and Santander. The VocaLink €CSM partnership aims to be highly inclusive encouraging banks of all sizes to participate fully in the SEPA. It allows the members to exercise a range of choices in meeting their client’s needs for the SEPA. In