STRATEGIC PARTNERS
September 2, 2002
LONDON -- Abbey National, the UK's sixth-largest banking group in terms of assets, is working with several providers of ATM services to give its customers chip-enabled bank cards by the January of 2005 deadline mandated by the UK banking industry.
Abbey National, which has more than 3,000 ATMs and 3 million cardholders, is among a handful of UK banks that have worked on a pilot scheme with ATM manufacturer NCR to certify specifications for ATMs to accept and process smart cards in accordance with EMV (Europay, MasterCard and Visa) standards.
Abbey National has already upgraded its ATMs with smart card readers.
Transactions from the new smart cards, which will be issued to customers from the end of this year, will be processed by technology from S2 Systems, a provider of transaction processing software, according to a news release.
Abbey National uses the ON/2 platform from S2 Systems to process transactions made by its cardholders in the UK, and is in the final stages of enabling its systems to read data from the new chip-based cards. S2 Systems is working with NCR to provide end-to-end chip card capability.
George Ogden, market development director for S2 Systems EMEA (Europe Middle East Africa), said in a news release that smart card transactions will be authorized by card holders using their PINs at both ATM and point-of-sale devices.
"Using signatures to authorize card purchases will gradually be phased out during the run-up to 2005 as banks and retailers deploy the necessary technology," said Ogden in the release. "Although it requires a massive amount of investment, the benefits of the new smart cards go beyond just combating fraud. Banks will also be able to use the cards for additional applications, such as loyalty, identity and paying for other services like transport."
The UK is migrating from magnetic stripe to chip to combat card fraud losses, which rose from £317 million (approximately $495.4 million U.S.) in 2000 to £411.4 million (about $643 million U.S.) in 2001, according to APACS (Association for Payment Clearing Services)figures.
Abbey National is also using an EMV FastTrack tool provided by Level Four Software, a developer of ATM test and development software
EMV FastTrack is a set of test tools that enables the creation of EMV-compatible ATM downloads and full end-to-end transaction testing directly from the chip card, through the ATM and up to the host system, according to a Level Four news release.
In conjunction with other testing software provided by Level Four, Abbey National can test high volumes of EMV chip card transactions by simulating its existing ATM environment. Abbey National staff can view ATM downloads exactly as they would appear on an ATM and design, configure and test new ATM content from any desktop PC on the network. This allows the bank to fully automate the ATM testing process so that staff no longer have to manually test transactions on real ATMs, which is both costly and time consuming.
According to the release, Level Four's software is not hard coded or fixed to a certain standard or protocol, so it can easily be updated to meet changing specifications.
Martin Macmillan, Level Four chief executive officer, said in the release that Abbey National is the first UK bank to adopt his company's software for EMV compliance. "We are currently in discussion with other European banks that face the same issues and require assistance in upgrading and testing their ATM networks effectively," he said.
