Edcon has once again demonstrated its ability to lead the market, completing a significant project conducted over a period of eight months to become SA`s first major retailer to have all the elements in place for the roll-out of a complete Europay-MasterCard-Visa (EMV) certified payment environment. First National Bank (FNB), which was integral in the compliancy process, has demonstrated its experience and knowledge as a progressive payment solutions partner.
FNB`s own infrastructure of more than 30 000 free-standing point-of-sale (POS) devices has been upgraded to EMV standards over the past two years, but this was the first major integrated solution to achieve Visa and MasterCard certification.
EMV is a set of specifications that define interoperability between chip cards - also called smart cards - and terminals on a global basis, regardless of the manufacturer, the financial institution or where the card is used. Smart cards are being introduced as a mechanism to combat fraud, while they also introduce extended functionality for cardholders.
From January 2005, liability for credit and debit card fraud shifts to the party that is not EMV compliant for fraud incidents that would otherwise have been prevented by an EMV compliant infrastructure.
The Edcon EMV project - undertaken jointly by JSE-listed trusted transactions company Prism Holdings, consulting group Accenture, Edcon`s in-house IT department, Mosaic Software and FNB`s technical and business teams - involves the upgrade and integration of no fewer than 11 000 PINpads at Edgars, Boardmans, CNA, Jet and Legit stores around the country.
"Customer service is a key priority within the Edcon Group. Utilisation of leading-edge technology, coupled with EMV compliance, will provide customers with enhanced service and greater levels of security," said Mark Bower, CEO, Group Services at Edcon.
According to Kestell Laurie, Head of FNB`s SpeedPoint and Cash product house, FNB played an important role in ensuring EMV compliance as Edcon`s acquiring bank. He explains: "FNB, as the acquiring bank, held the primary responsibility for ensuring EMV certification. As such, we worked closely with all parties to ensure full end-to-end integration and final submission of test output data to Visa and MasterCard for their approval, which ultimately resulted in our achieving EMV certification."
FNB and Edcon have a strategic partnership for acquiring payment services, and the certification confirms the value and benefit of this relationship.
According to Andrew Turpin, Director of Prism`s PayPoint Business Unit, the solution encompasses every part of the Edcon payment chain: from the customer-facing transaction terminals through the in-store server to the back-end switch. The switch is operated by Prism TranSwitch Services (PTSS), the transaction-switching arm of Prism Holdings, and interfaces with FNB. This solution is the first Visa and MasterCard certification of a fully integrated solution, both for SA and for FNB.
The POS terminals implemented for the project were the VeriFone SC5000 PINpads for which Prism obtained EMV Type 2 approval for its application kernel in 2003. The SC5000 PINpads support global smart card solutions based on EMV specifications as well as existing magnetic stripe debit and credit cards.
Clinton Nason, Project Manager at Accenture, says the long-standing relationship between Accenture and Prism, involving work done for Edcon over the years, played a major role in ensuring a smooth implementation.
"Despite the fact that this project was a first in terms of magnitude and technological requirements, we were able to manage the risks and difficulties - and still bring the project in ahead of schedule," he adds.
"This is a significant achievement and the team involved is to be commended for their focus and commitment, which enabled this success. We have delivered on our promise to provide business value through the appropriate use of technology," said Frank Pinto, Technology Executive from Edcon.
"We are delighted that we could join forces with other key role players in the South African payments industry to deliver a solution that puts Edcon at the forefront of combating retail card fraud in SA," says Dean Jordaan, General Manager of Mosaic Software. "Our internationally deployed software, Postilion for Retail, will enable Edcon`s consumers to transact securely, making electronic payment not only easier, but also one of the safest and most reliable modes of payment in SA."
"We are pleased that cardholders will soon begin to enjoy the substantial benefits that Visa chip card acquiring will bring to the payments market," said Chris Winter, General Manager and Senior Vice-President for sub-Saharan Africa at Visa CEMEA. "Chip technology will offer greater convenience to consumers, provide added protection to merchants, enhance the South African payment card system and provide future services we can only begin to imagine."
"Edcon are to be commended for leading the South African retail sector`s steady progress in the move to convert to EMV smart card technology," says Eddie Grobler, Senior Vice-President and General Manager, MasterCard Southern Africa.
FNB`s Laurie says that, as a result of the certification, consumers will be able to purchase goods at any of the Edcon group stores and pay with a bank-issued smart card as soon as these become available; FNB is introducing a pilot smart card programme in early 2005.
"With the joint experience gained on rolling out EMV compliance to one of the country`s largest retailers, we are confident that we are equipped to effectively assist all our major integrated business clients to rapidly establish the infrastructure necessary for the improved method of transacting," Laurie concludes.
FNB is a division of FirstRand Bank (Ltd) and is an authorised financial services provider.
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