card utility
The Australian unit of US technology services company Electronic
Data Systems (EDS) has commissioned what it terms the world’s first
shared service payment card utility. “Our utility provides card
processing for multiple institutions, driving down costs by up to
50 percent and allowing them to deliver new customer services that
are quite separate and unique,” said Chris Mitchell, EDS
Australia’s MD. “We’re offering payment and card providers the
latest technology, vastly improved economies of scale and rapid
time to market for new products.”
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New utility director Dee McGrath said without incurring huge
up-front costs, few Australian financial institutions could achieve
the level of technological and operational sophistication offered
by EDS’s new utility.
“Products such as prepaid, 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,”
explained McGrath. “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.”
Banks under pressure
She added that ageing IT systems have left Australian banks facing
pressure from foreign entrants that can offer customers more
flexible and innovative services. In addition, she said, there is a
shift in the balance of power at the merchant end of the market,
with demands for greater choice, tailored services and
differentiated pricing.
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By GlobalData“Merchants now have the ability to choose from new entrants with
deep pockets and new technologies which are typically delivered at
a lower price,” said 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.”
EDS’s utility is processing 70 million transactions per month and
has an initial capacity to process 10 to 15 million card
accounts.
