February 2013 | e-newsletter

Focus on Transportation Solution

Transportation Solution

MasterCard Money Send

3D Secure Recurring Payment service

2 | February 2013

Cards Market | Transportation Solution

Transportation SolutionMarkets on the moveAll around the world, the markets are adopting contactless technology and millions of contactless cards have been issued around the globe. Consumers, municipalities and Banks have all experienced the financial benefits, the convenience, the speed, as well as reliability of contactless devices. Contact­less cards have proven their advantages in numerous implementations, especially in the transport / ticketing markets.

As technology has developed in other sectors, most noticeably through mobile communica­tions and the switch to contactless cards in the banking industry, opportunities are open­ing up for operators to make public transport ticketing more convenient for users and cheaper to run. They also offer new ways of

Transportation Solution | Cards Market

Transportation Solutioncollecting revenue, breaking away from tradi­tional ticketing methods and their constraints.By moving to an open payment model, op­erators would become ‘merchants’ participat­ing in a bank­led scheme rather than owners of a dedicated ticketing infrastructure.

Provus is offering an integrated solution for public transportation that benefits both the owner of the transportation fleet, the Bank as well as the final consumer – the passenger

February 2013 | 3

Cards Market | Transportation Solution

4 | February 2013

The newest transit payment model is the open­loop card network, which enables customers to use an existing bank­issued contactless credit or debit card to pay for Transportation. As with other contactless payment methods, the consumer waves the card at the reader, whether it is at the fare box gate or at a validator. The purchase cost is then automatically deducted from the credit or debit card.Smart cards can be processed more efficiently and reduce complaints and customer service­related costs. Unlike cash, an electronic payment medium that is lost or stolen can be frozen, or “black listed,” to

Growing businessBy now, it has been shown that contactless cards have a positive effect on revenue and transaction frequency and so help all members of the ecosystem to grow their business. Early adopters will be able to attract new customers, while the transaction frequency of existing customers is likely to increase. Cardholders have the great advantage of being able to pay quickly and conveniently.Contactless payment systemsThere are two primary contactless payment systems: closed­loop and open­loop• The closed­loop system uses a stored­

value card that is limited to payment of transportation services.

• The open­loop system uses a payment meth­od that is also accepted by businesses out­side the transit agency that issued the card.

Transportation Solution | Cards Market

February 2013 | 5

make repeated purchases, the contactless card allows consumers to purchase tickets or “top up” from one transit operator and travel seamlessly between regions and different modes of transportation (e.g., bus, subway, and train) on participating mass transit systems. The ability to use one card on multiple transportation modes saves the customer time by reducing the need to research travel information and purchase individual tickets. Unlike paper­based tickets, smart card technology can perform complicated transactions: automated reload and recharge capabilities (via Internet, credit card link etc.), issuance according to passenger type, special fares according to passenger type or bus itinerary etc.

prevent unauthorized use­ if a lost or stolen smart card is registered online or at the sales office, it will be replaced at its remaining face value.For these reasons, electronic payment methods using smart card technology are more attractive to mass transit agencies and consumers. Convenience With regard to convenience, all prepaid options (i.e. non­cash) are relatively convenient to the rider. Convenience depends on ease of use of the payment option (need to purchase less often) and collection. Contactless cards offer high utility for mass transit cardholders because they are easy to use. Unlike cash, where consumers must

6 | February 2013

Cards Market | Transportation Solution

Reducing cost• Contactless smart cards offer

other advantages for mass transit authorities. Contactless card sys­tems eliminate mechanical parts

in ticket validating machines that cause lead deposits to build up, and minimize the high costs associated with malfunction, misuse, and maintenance.

• Contactless payments can also improve cash flow­ for example, there is no need for packing and shipping the paper based tickets, thus saving money on printing, packing and transportation.

• The speed of contactless transactions in­creases throughout by decreasing checkout times. Fast transac­

tions together with less cash or paper tickets handling enable the Companies to improve their overall efficiency and cut operational cost. Contactless terminals are also less likely to be vandalized, for example in an unat­tended environment – there is no card slot that could be rendered unusable.

• Although it is less expensive to produce oth­er fare media vs. contactless cards, contact­less payments are less costly overall because

of the lower investment in contactless equipment. Furthermore, the main­

tenance savings from eliminat­ing the paper based tickets

can more than offset the incremental cost of

using contactless smart cards.

Speed and Operational Efficiency A considerable benefit of the contactless smart card is quicker transaction time through the transit turnstile. Commuters no longer need to fumble for their tickets or tokens at the turn­stiles, feed payments into machines, retrieve tickets, walk through turnstiles, and put tickets back into their wallets. In Japan, the railway op­erators claim that their contactless system can admit 60 passengers per minute through each ticket barrier. More people moving quickly through the turnstiles translate to higher pas­senger throughput and increased operational efficiency for the mass transit operator. Security Contactless smart cards offer greater security for the consumer. Compared with other pay­ment options, they provide more storage as well as secure reading and writing of data. With contactless debit or credit cards, additional se­curity is provided through a series of encryp­tion algorithms and electronic keys. The con­sumer also has greater control over payments with a contactless smart card­ active participa­tion of the cardholder is required to perform a transaction.

February 2013 | 7

Transportation Solution | Cards Market

8 | February 2013

Cards Market | Money Transfer

In September 2012, CEC Bank in collaboration with Provus Service Provider became the first bank in Romania and the European Union to launch the sending function of the MasterCard MoneySend service. Being a novelty on the Romanian cards market, the service offers a viable alternative to the current classic transfer methods, which are, by comparison, more expensive and time consuming both for the client and the bank.

What is MasterCard MoneySend?It is the service that enables cardholders to send money from one MasterCard or Maestro card to another via ATMs, in a fast, convenient, reliable and secure manner, or to receive money in a MasterCard / Maestro card account sent by a cardholder from a MasterCard / Maestro card account.

February 2013 | 9

Money Transfer | Cards Market

From the clients’ perspective, it is an enhanced utility of their MasterCard and Maestro card to send and receive funds:• a fast, easy and low­cost method, supervised

by a major card organisation, to send person­to­person funds to family members and friends within a domestic market or cross­border to other countries, provided that both the sender and the receiver hold a valid MasterCard / Maestro card account .

• a convenient and safe way to receive money on a MasterCard / Maestro card account which can be withdrawn as cash at an ATM or which are available on their card account, just to use it for merchants purchases

From the banks’ perspective, it is:• a possibility to attract new clients which

appreciate the advantages of a card that offers the capability of sending money via an ATM

• a way to increase the loyalty and the satisfaction of the current customers, by adding new utilities to their cards

• and all in one – an opportunity to increase the revenues

Which are the benefits of MasterCard MoneySend?

10 | February 2013

Cards Market | e-Commerce

3D Secure Recurring Payment service

In August 2011, Romcard SA has launched the 3D Secure Recurring payment service, thus being the first card processor in Romania to have this product. Since the launch, Romcard has noticed both a constant increase of the number of merchants adhering to this service and of the monthly e-Commerce volumes.The product offers the possibility of multiple transactions processed at predetermined intervals, representing an agreement between a Cardholder and a Merchant to purchase goods or services provided over a certain period of time.

February 2013 | 11

e-Commerce | Cards Market

The individual clients - Cardholder establishes a relationship with a merchant to receive ongoing services (like bill payment for internet services or mobile invoice payment)• The client saves time, not needing to manually

perform the payments each time • The client saves money by not risking to pay

penalties in case he forgets to pay his billThe merchants benefit from “Recurring payments”:• in­cashing their invoices on time and not

receiving their money late due to potential client “forgetfulness”> improved cash­flow

• increase of customer loyalty• increase of customer service value• improved efficiencyBy offering “Recurring payments” service to its merchants, the Bank could benefit in terms of:• increasing product portfolio• increasing revenue due to higher processing

volume We believe that “Recurring payments” is one of the most convenient service and we trust that by offering this product to you, we help increase the quality of your services and your customers’ confidence in online payments.

3D Secure Recurring Payment service

“Recurring payments” service upholds multiple benefits for the Bank, its merchants and the final beneficiary of the service, the individual clients:

PROVUS SERVICE PROVIDER S.A.

Str. Vasile Milea 2H , Sector 6,Bucuresti, Cod Postal 061344, ROMANIA

Telefon: +40 21 202 69 00; +40 21 202 69 99 Fax: +40 21 315 85 57; +40 21 315 95 57

E-Mail: office@provus.ro

S.C. ROMCARD S.A.

Str. Vasile Milea 2H , Sector 6,Bucuresti, Cod Postal 061344, ROMANIA

Telefon: +4021 4020029Fax: +40 21 315 85 57; +40 21 315 95 57

E-Mail: romcard@romcard.ro

www.provus.ro www.romcard.ro