A United Kingdom-based smart card software company has launched Branch in a Box, a proprietary chip card service designed to encourage local spending in the UK and to enable consumers to organize their finances through their credit unions.

Augusta Systems Holdings Ltd. developed the card system to enable consumers to access credit-union services through local retailers, the company announced last week. France-based Ingenico SA will provide participating merchants specially designed terminals to accommodate acceptance of the contactless cards.

Augusta’s card-management system manages the proprietary card and serves as a credit union membership and account-management system. The card management system also supports the credit union member transaction processes, John Beer, Augusta marketing alliances manager, tells PaymentsSource. Transactions are sent electronically to a credit union banking partner, such as the UK’s Co-operative Bank. No international card brands support the proprietary card, Beer adds.

 “Branch in a Box allows UK credit unions the ability to expand coverage in the local area without any costs of opening branches,” Beer says. Moreover, “the credit unions appoint selected retailers to offer deposit and withdrawal capabilities together with account-status information,” he adds.

Other credit-union services consumers may access using the smart card include loan-purchase vouchers and retailer special-offer coupons. By giving out reward points and vouchers, merchants hope to encourage local shopping. Augusta Systems was unable to disclose the names of participating retailers but says they are not large chains.

The Mid Suffolk Key Card scheme offered through the Mid Suffolk District Council also plans to adopt the smart card system. Consumers who are older than 60, receive government benefits for unemployment or housing, are on a full-time government training program or are students, among other criteria, are eligible to participate in the Key Card scheme. Through the program, consumers may use the Key Card to receive discounts at local community services such as libraries, concessionary travel, discounted leisure facilities and prepaid car parking, and for benefit payments.

Another benefit for all consumers is the “personal carbon footprint” aspect of the program, Beers explains. If consumers take personal recycling to a local recycling center, consumers are then “presented with tokens that enable discounts on local council services such as property tax,” he says.

The smart card is most cost effective for transactions less than 10 British pounds (US$15 or 11 euros) because a less-expensive transaction reduces the amount of money taken out of the local economy in cash-management and bank charges, Augusta Systems notes in a recent release. “Inherently, transactions under 10 British pounds are a barrier to local retailers because of the EMV transaction and system rental charges,” Beer explains. The figures depend from retailer to retailer and the merchant services provider, but “on average we reduce the figured by 50% to 80%,” he says.

The multiapplication smart card system is based on Nxp Semiconductors’ Desfire Mifare technology, Augusta Systems says in a news release. The technology enables the card to hold up to 28 applications and 32 files per application, according to the Nxp Web site. The Web site did not specify the type of applications.

Additionally, the smart card system meets the EMV smart card banking security standard and the UK’s local authority specifications and frameworks, the release states.

“The UK is seeing an explosion in contactless payment types,” Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consulting firm, tells PaymentsSource. Smart cards such as Branch in a Box are a good product because the “new technology allows for more intelligence on the card for multiple offerings,” he says.

Moreover, it is important to give consumers some kind of value, Ablowitz adds. “Consumers follow value,” he says, noting the Branch in a Box smart card “provides value to get a special saving, and if consumers can see the value, they will want the product.” Overall, companies should “figure out a compelling offer for consumers,” Ablowitz adds.

Augusta Systems launched Branch in a Box based on a similar program it developed for an undisclosed African Bank, Beers says. Augusta is targeting credit unions and local banks evolving globally, he notes.

What do you think about this? Send us your feedback. Click Here.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry