Newcastle Building Society Enters the Card Payments Market

- ASP based solution ushers in cost effective, outsourced application for issuing debit cards as Society extends product offering -

Newcastle Building Society, the biggest building society based in the North East of England and currently the 13th largest in the UK, plans to enter the card payments market for the first time using an outsourced model – Debit Direct from NOMAD Software - to deliver the service.

This new facility is a departure for the Society which, as a traditional building society, has not historically offered core banking services. However, Newcastle has a long history of implementing information technology to deliver new and enhanced services to its members and this latest move is being seen as an extension to this.

Colin Greaves, General Manager, Newcastle Building Society, stated: "We were one of the first building societies to use the Internet, one of the first to offer a share trading service via the Web, and one of the first to implement a call centre, all of which was driven by a desire to offer our members more choice in the products we offered and an improved service.  Offering cards is the logical next step, enabling our customers to gain easy access to their funds."

The new service, currently being installed and tested with roll-out to customers expected later in the year, is an outsourced application - Debit Direct, developed and marketed by NOMAD Software, founded on NOMAD’s proven card payment solution – NOMAD CORTEX.

Debit Direct will enable Newcastle to issue MasterCard’s secure debit card offering ‘Maestro’ to its customers. Transactions will be processed and authorised 24/7 and an online feed will be provided to Newcastle’s core system. No infrastructure is required at Newcastle save for standard web browsers with which to access NOMAD's CORTEX software running at an IBM hosted site. Debit Direct will also manage all card production, personalisation and PIN mailers on behalf of the society.

Colin Greaves explained: "This outsourced model has ensured that Newcastle Building Society can provide this enhanced service for its members at a reduced risk.  Not only are the typical costs associated with entering the card market using an in-house system prohibitive, but with the rise in consumer concern in electronic and card based fraud, we were at pains to find a solution that could address these issues head-on, while providing a cost effective service.  In Debit Direct I believe we have found a totally robust, low risk answer."

He continued: "We are committed to not only our extensive branch network, but also our existing multi-channel delivery strategy comprising both the Internet and telephone.  The provision of this new card service is totally sympathetic to this enabling our members to get the very best in service from their Society."

Debit Direct has been specifically developed for those banks and building societies that have not been able to issue debit cards in the past due to the typically high costs and complexity associated with implementing an in-house solution. Not only is Newcastle now able to attach Maestro debit cards to accounts it offers to its members, but through its subsidiary, Newcastle Strategic Solutions Ltd (NSSL), it will be marketing the same offering to other Societies and their members in turn.

Robert Hollinshead, Chief Executive, Newcastle Building Society, stated: "Newcastle Building Society is always exploring new ways to serve its members and enhance their customer experience.  Attaching the highly secure Maestro debit cards to a variety of accounts represents a clear advance in this respect.  We are delighted to have found, in NOMAD Debit Direct, a first class outsourced service which provides fully chip and PIN compliant Maestro issuing and look forward to offering this additional service to other financial institutions via NSSL."

John Yeomans, Chief Executive, NOMAD Software, stated: "Newcastle Building Society is one of a number of financial organisations that have now joined our Debit Direct service.  The interest NOMAD has received in this new service, alongside the speed of uptake, confirms that there has been a pent up demand in the market for a high quality and, importantly, cost effective outsourced solution that addresses consumer expectation for modern access to funds."

"The use of the debit card as an instrument to access funds is far outstripping other methods and the tendency to hold more than one debit card is also on the increase. This dramatic rise in consumer demand dictates that those financial institutions without a debit card issuing facility face a challenge that needs to be met," he added.

Keith Hobbs - Vice President, Business Development of MasterCard Europe stated: "We are delighted to be involved in this revolutionary initiative and see it as a unique route to market for financial institutions here in the UK. Those banks and building societies, such as Newcastle, keen to enter the debit card market, but unable to do so because of the high costs associated with the traditional in-house model, now have a totally viable model."

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