Ukreximbank's processing on WAY4: 10 years of progress
How is this milestone year going in terms of processing? Have you had time to make a stop, to look back and review the results?
To strike the pause button, to take a look into the past is an unaffordable – though alluring – luxury. It is important for the bank to keep pace with the dynamic beat set by the card and payment market. This is why we celebrated the anniversary, so to speak, on the go. This year, the highest priority for our processing is Visa and MasterCard certification for the launch of contactless payments payWave and PayPass. August, the month of the anniversary, found us on the home straight – Ukreximbank’s contactless POS terminals start operating in retail networks in the autumn, and we are ready to issue the first cards with the contactless interface.
As to preliminary results, 2012 has also been a good year for retail acquiring: the turnover for the period from January to August has exceeded the last year’s figures by 18 percent and has reached 1.98 billion hryvnas. In addition, partnership in the field of e-commerce is rapidly developing. The number of online shops that accept card payments using Ukreximbank’s 3-D Secure antifraud service has doubled since last year.
What processing numbers, technologies, objectives did your bank start with and what are the achievements of the last ten years?
To start with, Ukrexim’s first payment cards were issued in 1996. We first used software from Tieto, but eventually it no longer met our goals and plans for the future. At the end of 2001 a decision to migrate to another processing system was made. We carried out a research, assessing solutions from various vendors by a multitude of parameters. As a result, we chose WAY4, a software solution from OpenWay, which we found the most promising, flexible, and functionally developed.
Implementation and card portfolio migration to WAY4 took four months, from April to July, and we consider 1 August 2002 the beginning of the new life of processing in Ukreximbank. By that time, we had issued about 80,000 cards, all magnetic stripe ones. In the beginning of 2002, acquiring, i.e. about 100 ATMs and approximately 300 POS terminals, was migrated as well.
Over the last ten years, we developed as rapidly as the card, payment and money transfer industry itself. On the new infrastructure, our bank has successfully implemented various technologies to meet ever- increasing demands of the market. Ukreximbank acquires about 1.2 million international Visa and MasterCard cards at the moment. We aim at diversity: clients can choose between debit and credit cards, virtual cards with an unlimited top-up amount, as well as corporate cards. We were one of the first banks to switch to EMV card issuing and acquiring, and today virtually all cards, even salary cards (upon the company’s wishes), can have an EMV chip. This year, we are starting to issue contactless payment tools – Visa’s payWave and MasterCard’s PayPass – as well.
Our ATM network now consists of 738 devices. Using the Google Maps service, cardholders can quickly find the nearest ATM and use its diverse services. In addition to the classical cash withdrawal, our clients also favour P2P transfers within international payment schemes and cash-in with instant card top-up in hryvnas, dollars, or euro.
The number of our POS terminals, including wireless and contactless, is now about 10,000 devices. Ukreximbank works as an acquirer with the largest retailers, best hotels in the Ukraine, filling station networks, and many other merchants. Prior to the Euro 2012 football championship, the bank carried out an interesting project: installing POS terminals in the cabs of a large Kiev taxi service. Also, the bank acquires international payment cards for one of the largest Ukrainian airline carriers: for Ukreximbank, the sky is the limit, literally.
In 2010, American Express chose us as the only acquirer of AmEx cards in the Ukraine. This shows both that Ukreximbank has a high quality of client service and that our processing meets the requirements put forward by American Express. Indeed, accepting AmEx cards is a must for hotels, de luxe restaurants and premium-segment shops, where everything should work smoothly and without fail.
Another achievement of ours is close cooperation with Ukrainian banks, whom Ukreximbank helps work in international payment schemes. Many of them fully rely on us as far as issuing and acquiring are concerned. Banks that have their own card solutions use our resources for routing and authorization in payment schemes. We have 16 partners of this type at the moment.
What does Ukreximbank’s management take into consideration when introducing new products and services to the market? What are your selection criteria for perspective card and payment technologies?
As a rule, the processing development vector is influenced by several factors at once. Being client- oriented is of utmost importance for us. We are a state bank and work with various segments of the population as well as corporations, and try to offer each segment the most usable and relevant payment tool.
For example, Ukreximbank issues Maestro TeenCard cards for the younger people who gradually get acquainted with bank services and get accustomed to cashless payments. We are actually raising our future loyal clients. At the same time, this product allows parents to control how teenagers spend their money: to get a text notification of every transaction or set certain limitations. For these cards’ holders, we organised a campaign called “Summer vacation with TeenCard”, where each participant got a discount card of a sports store network and a chance to win prizes from MasterCard.
For another user segment – which generates quite a few retail transactions – we issue the Visa Lady's Club card. In addition to an attractive design, this card has another nice feature: it allows its holders to get discounts in various boutiques, beauty shops and retail networks. Ukreximbank also prepared for the main sports event of the year – Euro 2012. Specially for football fans, at the beginning of the year the bank issued MasterCard cards with “football” design, including the first in the Ukraine payment card with 3D effect.
As a state bank, we naturally pay a lot of attention to socially important projects. This is why we developed a charity programme “Razom za zhittya” (Together for life) based on Visa Classic cards. These cards’ design was developed by a well-known artist Yevgeniya Gapchinskaya. Holders of these cards make a contribution to the cause of kids with cancer – 75 kopeks from each transaction are transferred to the account of the children’s ward of the National Institute for Cancer. Using Ukreximbank’s Web banking system Enter EXIMTM, clients can also set up regular payments from their account or make charitable donations directly to accounts of medical institutions. Since the launch of the programme, over 6,000 cardholders have joined in, and over 4 million hryvnas have been collected and used to buy special equipment, surgical instruments, and medicine.
Ukreximbank’s products and services are easily adapted to specific requests of the corporate segment. Our portfolio is not limited to salary and T&E plastic cards. For instance, freight companies supply their drivers with special Ukreximbank’s cards for optimised fuel top-up and car service payments. Our processing system also allows each company to receive card funds flow statements in its own custom format, with individual frequency and level of detail.
It is sometimes necessary to select one of several technologies that can be used to implement a new goal. In this case, our team analyses similar projects in other countries and strives to find the reasons and consistent patterns behind other banks’ successes and failures. Our partners with international expertise also help us make such decisions – they share the experience of their clients from around the world and recommend how it can be adapted to Ukreximbank’s objectives.
Yet another drive for card business is, of course, requirements of international payment schemes. With the support of OpenWay, the bank has successfully passed a number of certifications: in 2004, to issue and acquire EMV cards, in 2006, for Internet acquiring under 3-D Secure protocol, in 2009, to comply with PCI DSS security standards.
It must be mentioned that Ukreximbank is one of the few banks in the Ukraine with PCI DSS compliant fully-fledged in-house processing. Now, we annually undergo PCI DSS audit to confirm that our bank operates in strict correspondence with international best practices in the field of security.
What processing projects are scheduled for the remaining part of 2012 and for the next couple of years?
I think that the contactless technology project will remain our highest priority. We expect to have installed up to 500 POS contactless terminals by the end of 2012 and to have issued about 20,000 Visa payWave and MasterCard PayPass cards by the middle of 2013.
We also follow closely the development of the NFC payments and transfers on smartphones. These technologies will probably act as a fillip for further development of our mobile and Web banking.
Ukreximbank’s acquiring of American Express cards has already reached a point where the scales and turnover of this partnership require bringing it to a whole new level. Our plans for the nearest future include implementation of cash withdrawal service in ATMs using AmEx cards and acquiring of AmEx cards on the Web.
It may well be so that there will be other, unscheduled, projects, brought forward by the requirements of the market or of international payment schemes. Not to be caught unaware is exactly the reason why a while ago our bank migrated to a multifunctional and flexible processing system. And now our practices are being adopted by our colleagues. For instance, not long ago we were visited by Raiffeisenbank’s international team. One of the largest banking groups in Europe had chosen WAY4, and its representatives took interest in our in-house processing configurations and successful card projects. This is one of many signs that ten years ago Ukreximbank made a strategically right decision.