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S1 CASE STUDY

S1 Retail Payments & S1 Card Management at Edcon

A leading South African retailer keeps its payments platform up to date with evolving requirements to serve customers at 13,000 points of sale

Edcon Holdings (Pty) Ltd is one of South Africa's leading retailers of clothing, footwear, textiles, stationery, and housewares. The company has 1,280 stores, operating under 10 retail brands. Edcon's relationship with S1 dates back to 1996, when it implemented the forerunner of the S1 Retail Payments solution. Today, S1 software supports card transactions acquired by more than 13,000 point-of-sale terminals at Edcon's stores.

"For 15 years, Edcon has relied on S1 for enhanced payment processing capabilities, enabling us to compete effectively and to keep pace with technology and regulatory changes." --Henri Slabbert, Chief Information Officer, Edcon

Edcon Requirements

Through the years, Edcon has continued to expand its use of S1 Retail Payments, which encompasses in-store point-of-sale software, a central payments switch, and back-office payments processing. With S1 providing a unified, fully integrated platform for electronic payments, Edcon has the flexibility and scalability to support both store acquisitions and organic growth. The solution helps enable rapid roll-out of new features, stores, channels, payments types, and point-of-sale devices. "S1's Retail Payments solution is at the heart of our operations," said Henri Slabbert, Chief Information Officer at Edcon. "It touches our customers directly. We average 21 million payment card transactions each month, so it's crucial for us to have high availability. We must also ensure we keep the system compliant with the latest bank and international payments scheme requirements. For 15 years, Edcon has relied on S1 for enhanced payments processing capabilities, enabling us to compete effectively and to keep pace with technology and regulatory changes."

The S1 Business Solution

In addition to using the S1 software that allow cards to be accepted in-store and transactions switched to the appropriate entity, Edcon uses S1's Card Management solution to manage its four million private label payment cards. This includes settlement and reconciliation handling. Henk van der Watt, Service Delivery Executive Manager at Edcon, cited three examples of how Edcon and S1 have worked together to meet new requirements with enhanced payments processing capabilities: EMV card acceptance, business continuity architecture, and airtime recharge of consumers' mobile phones.

Business Benefits

· Flexible, unified payments processing platform for multiple store brands and sales channels · Cost savings through process efficiencies and improved staff utilization across the business · Better management reporting from streamlined processes and consistent, unified information from each store brand · Improved control helps enable greater responsiveness to customer needs · Rapid roll-out of new features, locations, payments types and point-of-sale devices · In-house processing helps reduce fees paid to third parties · Improved customer service by keeping queuing times short · High service levels through S1's active/ active architecture, which offers up to 24/7 system availability · New ideas and ready-to-implement features developed by S1 in its work with other leading retailers around the world · High-caliber expertise from people committed to Edcon's success

EMV card acceptance Along with financial institutions around the world, banks in South Africa are enhancing transaction security and better controlling fraudulent copying of cards by issuing EMV smart cards to replace magnetic stripe cards. Needing a cost-effective way to implement the EMV chip and PIN technology throughout its vast store network, Edcon turned to S1. Over the last five years, S1 has helped many large retailers around the world reduce their fraud exposure by moving to the EMV standard. "By sharing their extensive EMV experience with us, S1 simplified our migration to a smart card acceptance infrastructure. We implemented EMV in 2009, in time to support credit and debit cards used by international visitors to the 2010 World Cup," Henk van der Watt commented. Business continuity architecture At busy times, Edcon may experience more than a million card transactions in a single day, with a peak of 450 transactions per second. Due to the reliance of customers on card payments these days, the company cannot tolerate any system downtime. To maintain business continuity and help ensure high customer service levels, Edcon implemented S1's active/active, high availability architecture in 2009. This involves running two parallel systems, each sharing the processing load. In the event of a hardware, network, or application issue, all transactions are handled by a single system without any manual intervention being required. Transactions are synchronized at application level, providing complete data integrity and eliminating the need for additional hardware-based components. "S1's active/active approach to system availability and disaster recovery is unique in the EFT space," said Clinton Nason, Edcon's Solution Architect. "It helps enable us to ensure 24/7 operational continuity, where even planned downtime becomes invisible to our store staff and customers. We were impressed by how easy it was to introduce S1's active/active." Airtime recharge Approximately 90% of South African mobile phones are operated on a prepaid basis. Phone owners, who have to recharge (or "top up") their account balances regularly, like the convenience of doing so at their favorite retailers. This service is not only attractive to customers, but can also bring financial benefits to the retailer because mobile phone operators pay a commission for each top-up sold. Edcon was offering airtime recharge services through a third-party provider. In 2010, it brought this capability in-house by implementing the airtime recharge feature of the S1 payments platform. Now Edcon can provide top-up services without paying processing fees to a third party. "The top-up service has already become a healthy revenue stream for us. In December 2010, we processed over 1.5 million airtime recharge transactions," said Henri Slabbert. "We have been able to use some of the incremental revenue to accelerate IT projects that would otherwise have had to wait for later years." Slabbert emphasized the value he has seen from Edcon's long-term relationship with S1 as its strategic partner for electronic payments. "We know we're getting more than software from S1," he said. "We're also investing in trust, reliability, service, and the confidence that S1 is a long-term participant in our success. We know S1's professionals are always there to serve us if a problem arises or when we want to add capabilities that will help strengthen customer service, improve staff productivity, or enhance profits."

For more information on S1 solutions, visit us on the Web at www.s1.com

Copyright © 2011. S1 Global Limited. All rights reserved. CS/Edcon/1/Apr-11/CC Public distribution.

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S1 Retail Payments and Card Management at Edcon

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