With the introduction of ‘smart’ cards and ‘smart’ terminals, Banks now have the capabilities which use to be exploited by the largest smart-card users in the world - the Telcos. Telcos have over the years innovate what they can do with the ‘smart’ SIM (Subscriber Identity Module) cards ranging from contacts information, SMS mailboxes, games and on-demand applications such as live stock quotes, video streaming to electronic wallets, etc. to increase its subscriber spending.

Banks are now able to leverage on these features of the smartcard to have multiple applications residing on the smart card and localized storage of information to create customized offerings or personalized services for card holders. This allows Banks to create one-to-one marketing program, tracks consumer spending patterns more efficiently and offer cross-selling opportunities at the point-of-sale through the download of vouchers or promotions. At the same time, utilizing the ability to perform off-line transactions, Banks can be more business friendly to merchants by instituting variable floor limits so as reduce transaction time while managing credit and fraud risks, especially in fast-food outlets where quick service turn-over is of paramount importance.

As highlighted above, with customers’ increasing demand for greater convenience and service level, a simple card payment transaction no longer suffice to fulfill customer needs. More complicated and complex transactions incorporating loyalty program, privilege program, voucher program, personalization program, etc. together with card payment transaction is going to be the norm in the near-future.

In order to achieve the above goals, Banks need to have an intelligent transaction platform which supports a key concept termed Active Transaction Routing (ATR) which allows a single ‘composite transaction’ to carry multiple constituent transaction messages. These messages can then be composed into various combinations to create a wide variety of unique services. With this platform, the Banks are equipped with the flexibility of implementing new applications and complex business rules that extend beyond the Banks’ hosts to third party service providers, etc. with minimal customization to back-end hosts. This capability and agility to create new services will not only enhance revenue or reduce costs but will also further strengthen the bank’s competitive edge.

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An example of such a service is the ability for a cardholder to purchase prepaid mobile airtime reloads via credit card and the subsequent award of loyalty points or vouchers for the transaction. Creating this service will bring about the following benefits:

• Provides service differentiation and convenience to the bank’s cardholders; thereby reducing churn and encouraging spending

• Generates additional revenue stream through prepaid mobile top-up transaction margins

• Attracts merchants participation in the bank’s loyalty program and also, creates the potential to introduce cross-selling via the award of electronic vouchers