creating value added services pay life ewald judt

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Creating added-value services for card products to promote customer loyalty

The Future of Cards and PaymentsThe IEA & Marektforce‘s Inaugural Conference

London, 2 nd and 3 rd July 2008

Ewald Judt PayLife Bank

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Cards in Austria

• Austria is a debit card country due to historic developments.

• Credit cards are only taken in addition to the debit card; every credit card holder also has a debit card.

• In 1998, the Austrian banks decided to migrate their domestic debit „Bankomat“ scheme to a worldwide accepted PIN scheme.

• Maestro was chosen, the only cross-border PIN debit scheme at the time.


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Maestro in Austria

• Today Maestro is the most important card-based payment system in Austria.

• With 7 million Maestro Bankomat cards in circulation, all Austrians between 18 and 80 have more than one in average.

• In contrast to this, there are only 2 million credit cards.

• Maestro is not only the cross-border debit brand in Austria, it is also the domestic debit brand.

• There is a wide Maestro acceptance throughout the country at 100,000 merchant locations, including all food and petrol chains.


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Basic Debit Functionality

• Access to the current account through cashless & cash advances around the world around the clock

• Safe access to the current account by using PIN

• Easy access to the current account by the same procedure at the POS and ATM as at home

• Access to the current account at a good price


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• Migration to the „PayChip“ for domestic use (POS and ATM) only

• Introduction of chip-based pre-authorized debit transactions

• E-purse function on the „PayChip“ –Quick, the Austrian electronic purse

• Chip-based loyalty programs on the „PayChip“


Enhanced Debit Value Proposition with theMigration to the (proprietory) Pay Chip since 1996

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(1) Migration to the „PayChip“ for domestic use (POS and ATM) only

• No domestic debit card transactions on magnetic stripe basis anymore

• Massive fraud reduction in domestic debit card transactions (> 90 %)

• Considerably higher „perceived“ security by the cardholders


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(2) Introduction of chip-based pre-authorized debit transactions

• Chip allows offline transactions through a pre-authorized amount.

• Offline transaction is brought about by dialogue between chip on the card and chip in the terminal.

• The offline amount is limited depending on card and week.



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(3) E-purse function on the „PayChip“ – Quick, the Austrian electronic purse

• Introduction of Quick was a success story.• After Maestro, Quick currently has more domestic

transactions than any other card product in Austria.• Precise use for small and minute amounts = coin

substitution: Ø ticket value € 5 (Ø ticket value debit € 50, Ø ticket value credit € 100)



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(4) Chip-based loyalty programs on the „PayChip“

• Debit card can store a large number of loyalty programs.

• After joining the loyalty program, a marker is set on the chip and/or storage space is reserved.

• „Friends of Merkur“ is the highest used loyalty program on the chip of the debit card – and the most successful loyalty program in Austria.



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• According to international developments migration to EMV chip

• Acceptance in the nationwide gateless electronic toll system for trucks at motorways

• Loading value on pre-paid cellular phones at ATMs• Secure Code transactions with

Maestro Bankomat cards in the virtual world • (Sleeping) Digital signature on the chip• Youth identifier for the usage of tobacco

vending machines


Further enhanced Debit Value Proposition since 2003

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(5) According to international developments migratio n to EMV chip

• Since 2003, the EMV application is integrated in the chip in addition to the „PayChip“ application.

• All debit cards thus meet the highest international security standards.

• High security is thus offered not only domestically, but also in Europe (and to an increasing extent also outside of Europe).



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(6) Acceptance in the nationwide gateless electronic toll system for trucks at motorways

• Truck and debit card are registered as belonging together.

• Toll bill is prepared in a dialogue between the „Go Box“ installed in the truck and the toll portals.

• Toll payment is made by means of recurring payments.



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(7) Loading value on pre-paid cellular phones at ATM s

• „Code & Load“ function allows loading pre-paid cellular phones at ATMs.

• Works with all debit cards for all pre-paid cellular phones whose operators are active in Austria.

• Confirmation of successful loading occurs by SMS; clearing & settlement occur as in a regular POS transaction.



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(8) Secure Code transactions with debit cards in the virtual world

• Secure payments in the internet are possible after registration of the debit card for „Maestro Secure Code“.

• Registration through www.bankomatkarte.at

• Secure payment occurs with unique 16-digit card number and the chosen secure code.



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(9) (Sleeping) Digital signature on the chip

• Since 2005, all chips of the debit cards have a (sleeping) digital signature „a.sign premium“ of A-Trust GmbH.

• Activation is possible by registration at one of the many registration points of A-Trust GmbH.

• For using the digital signature, the debit card holder merely requires a chip card reader and can perform e-government, e-banking, e-billing, …



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(10) Youth identifier for the usage of tobacco vendi ng machines

• Since 2007, all chips of the debit cards have a youth identifier (cardholder < 16 years of age) for unlocking tobacco vending machines

• Age check occurs with a Quick module built into the tobacco vending machines

• After unlocking the tobacco vending machine, one can pay with Quick (fast) or with coins or banknotes (slow)



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Enhancing the Debit Value Proposition?

Do you think that enhancing the functionality makes sense for your debit card base?I‘m interested in your opinions!

Thank you.


creating value added services pay life ewald judt

Economy & Finance

debit cards

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domestic debit brand

introduction of chip

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loading value