ANNEXURE D - Welcome to eTenderPublication | National … · · 2018-01-19Provider will perform...
Transcript of ANNEXURE D - Welcome to eTenderPublication | National … · · 2018-01-19Provider will perform...
RFP27/ ATM & SSD Acquiring project
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ANNEXURE D
1. Background and introduction Postbank, a division of the South African Post Office, and Financial Institution, intends to
certify as an ATM and POS Acquiring bank which will unlock new revenue streams for the
bank and will expand its current product offering in the market. As part of its value proposition
to existing and new customers, Postbank has secured Acquiring licenses from both Visa
and MasterCard that will allow it to launch its very own ATM network using a dual approach
to position ATMs at various locations within SAPO locations, but also elsewhere where traffic
and volumes (from existing and other bank customers) prove commercially viable. Data
from the SARB and other banks, suggest that cash is still on the rise, strengthening the
business case for ATMs.
An ATM network comprises of various components, namely device hardware management,
software management, switching and Cash-in-Transit (CIT) - each of which requires
immense capital expenditure, set-up lead time, expertise, integration and human resources
in order to successfully launch, and operate. The provision and management of an ATM
network requires intense specialisation, and for this reason, many of the other banks with
ATMs have decided to operate this infrastructure on an outsourced basis through
specialised Service Providers.
In line with the trend by government departments and state-owned companies to off-load
non-core and specialised assets from its balance sheet in an attempt to reduce capital
requirements from state coffers, the business case for a fully outsourced and managed ATM
business model was demonstrated to the Postbank PPC, and adopted for implementation.
Based upon target customer needs, Postbank has identified two types of ATMs for
deployment, namely cash dispensing ATMs and those that integrate with Merchant stores
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allowing customers to take expensive and risky cash out of merchant environments. Service
Providers also perform a vital function in that they work closely on an ongoing basis with
banks in order to maximise and optimise ATM placement in order to reduce the risk of
duplicated infrastructure that do not meet transactional traffic thresholds. Service Provider
who work closely with switch operators in the industry is best placed to know and advise
banks in terms of spread and distribution of existing ATMs location of other banks, well as
areas where demand growing is, but not met with sufficient infrastructure.
Service Providers who have already invested millions into operating ATMs on behalf of
banks, are willing to achieve economies of scale while relying upon the strong brands and
trust factor that comes with existing banks. The banking industry is among the most
regulated of all industries, and for this reason, ATM Service Provider know that in order to
make money, customers are likely to transact on their own bank ATMs or least on those
belonging to established banking brands. Some Service Providers are willing to incur all
costs relating to the capital expenditure and ongoing operational costs of operating an ATM
network, in exchange for leveraging off the strong brands, customer base and banking
licenses held by banks. In this way Service Providers are able to acquire transactional
volumes through their ATM networks, while banks are able to make revenue off Acquiring
infrastructure which it does not have to own or maintain. This option was shown as the most
commercially viable option for Postbank, as it results in the lowest Total Cost of Ownership
(TCO) for the Group.
The purpose of this document is to define the specifications required for the tendering and
procurement of a fully managed outsourced solution of ATMs. Under the proposed
procurement scheme, the successful Service Provider/s will work closely with Postbank in
order to establish an ATM footprint bearing the Postbank brand, mainly in locations where
transactional banking volumes are in supply. The locations identified could be within
strategic locations in SAPO premises (with the support and permission of Retail and S&I),
or they could be retail locations where space will be rented from reputable Landlords.
Service Provider/s will be required to manage all interactions and fit all costs arising from
sourcing of rental space on an ongoing basis. It is not possible to quantify upfront an
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exhaustive view of every single ATM deployment upfront, as there are many factors which
will drive this over time, for instance, evolving customer demand, other bank’s ATM
deployment strategy, and opportunities arising from new property development and mixed
economic development nodes across the country. All CIT function pertaining to
replenishment of ATMs will be managed by the Service Provider who in turn will use its own
partners to stock ATMs. The Service Provider will carry all risk arising from fraud, theft of
robberies. While Postbank will be given real-time access to any of its ATMs, The Service
Provider will perform all monitoring functions across the envisaged Postbank ATM footprint,
with no problem management intervention required from Postbank. This is a highly
desirable business model as it lowers the TCO for the banks, and allows the bank to acquire
a new revenue stream.
2. Objectives of the bid Postbank’s objectives with this bid are to: • Appoint a Service Provider who is able to provide a “Fully Managed Service” for the
deployment and management of an ATM and SSD network including transaction
switching to all three Payment System Operators i.e. VISA, MasterCard &
BankservAfrica.
• Appoint a service provider with skills and capabilities to facilitate with the certification of
Postbank as acquiring bank with all industry stakeholders as mandated by PASA and
SARB
• Contract with the successful bidder for a period of three (3) years with the possibility of
further extension as Postbank is seeking to achieve its organisational and strategic
objectives through alliance partnerships.
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3. SCOPE OF WORK
Postbank requires the following products and services that encompass the “Fully Managed”
service from a single service provider:
3.1 Systems Integration and VISA Certification Process
Postbank is a primary member of VISA and MasterCard and already in possession of Issuing
and Acquiring BINs for both associations. Postbank however hasn’t activated the acquiring
BINs as it is yet to acquire and implement the switch (Postilion) acquiring modules. As an
interim solution, the winning bidder will be expected to facilitate with the integrate into
Postbank’s systems as well as facilitating with the ATM Acquiring certification utilising the
bidder’s transaction switch to route all transactions to all the card associations (VISA,
MasterCard & BankservAfrica) on behalf of Postbank. Postbank will take over the
routing/switching of transaction to VISA, MasterCard and BankservAfrica as soon as the
Postbank switch is upgraded and internal certification process successfully completed. The
diagram below depicts the proposed systems integrations and flow of all ATM transactions.
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Figure 1: High Level ATM Acquiring Architectural Overview
Item Description
1 Integration Link between the Service Provider and the Postbank Switch.
Customer transaction data from the Service Provider switch should be replicated
onto the Postbank switch for record keeping purposes.
2 Certification of Postbank as an ATM Acquirer with BankservAfrica
3 & 4 Certification of Postbank as an ATM Acquirer with VISA and MasterCard
5 Postbank branded SSD connected directly to the Service Provider switch
6 Postbank branded ATM connected directly to the Service Provider switch
3.1.1 Impact on Postbank internal Systems and Processes
We do not anticipate signification impact or changes on Postbank internal systems as the
current processes utilised for settlement of the current SAPO branch outlet OTCD and
Saswitch ATM transactions will be sufficient. The following minimum changes will be
expected:
All new terminals (ATMs and SSDs) will be recorded in Postilion/UBS
All merchants that will be allocated an SSD will be expected to open a business
account with Postbank that will be used for settlement purposes.
A new product code for SSD transactions will be created in UBS
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3.2 Managed Services
Upon successful systems integration and completion of ATM EMV Acquiring certifications,
the winning bidder will be expected to deliver the following services to Postbank:
Requirement Description
Site Identification and
Selection
The ability to utilise various data sources to create heat maps
identifying best possible locations to deploy Postbank branded
ATMs. Ability to apply other criteria including safety and
security, competitor ATMs and ease of servicing to assist with
the selection of the most suitable site location. The Service
Provider will work closely with SAPO’s Security and
Investigation team to determine the site security prior to
approval for installation. The identification and selection of
ATM sites is an ongoing process involving both the Service
Provider and Postbank/SAPO. SAPO has the final say in the
approval of all identified sites.
The Service Provider will be required to provide a 12 month
deployment plan to rollout 100 cash ATMs and 100 SSDs within a
month of being appointed. The plan will include rollout into agreed
SAPO branches as well as offsite ATMs.
Site Rental (except for
SAPO Outlets)
Negotiating with the landlord and ensuring that the proper
lease agreement is signed. This will apply to all offsite ATM
sites. For Postbank branch sites, the SAPO Properties in
conjunction with the retail business unit, will be responsible for
negotiating with the landlord (in cases where the branch is not
owned by SAPO). Postbank will pay SAPO an agreed monthly
rental.
Device Types &
Functionality
The ability to supply and deploy both cash dispensing ATMs
and Self-Service Devices (SSD). For SSDs, Postbank will only
consider devices with large screens and the look and feel of a
proper cash dispensing ATM. The following transactions are
expected from both of the devices; Cash withdrawals, Balance
enquiries, mini statements, prepaid airtime, prepaid electricity
ATM Purchase &
Upgrades
The ability to purchase and upgrade ATMs at short notice.
Postbank will expect the Service Provider to supply and install
the ATM within 4 weeks of obtaining a signed lease.
Site Preparation
(including wet works)
The Service Provider will be expected to generate
installation/construction designs for each site and seek
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approval from and SAPO Properties and the Retail business
unit prior to site construction
ATM Transportation The transportation of ATMs and related construction material
will be the sole responsibility of the bidder
ATM Installation & de-
Installations
The installation and de-installation of ATMs will be the sole
responsibility of the bidder. De-installation of ATMs will be
based on joint decision between the bidder and Postbank.
Branding & Signage The design of ATM branding and signage including application
guidelines will be managed by Postbank. The bidder will utilise
the designs and guidelines to ensure that the applications are
in compliancy with Postbank requirements. The ATM/SSD
screens will be branded to comply with Postbank’s brand
specifications.
ATM Maintenance – 1st
and 2nd Line
Maintenance
Ability to remotely identify problematic ATMs and despatch the
relevant personnel to go and fix within a reasonable and
agreed response time (MTTR)
Transaction Switching –
to VISA, MasterCard
and Bankserv
Ability to route all ATM transactions to the relevant channel for
authorisation. Transaction from other bank customers are
either routed to Bankserv, VISA or MasterCard and Postbank
customer transaction will be routed directly to Postbank for
authorisation.
Consumable Supplies –
Receipts
The bidder will be responsible to the supply of ATM receipts
and any other related consumables
Cash Supply – Based
on received orders
The supply of cash will be the responsibility of Postbank. The
Service Provider will order the cash via the agreed Postbank
Channels
Cash Logistics
(Transportation and
ATM Replenishment)
The transportation of cash and replenishment of ATMs will be
the sole responsibility of the Service Provider. A PSIRA
registered service provider to be utilised
Cash Insurance The insurance of cash as soon as it leaves the cash centre, in-
transit and in ATMs is the responsibility of the Service Provider
Cash Forecasting &
Reconciliations
The bidder will use automated cash forecasting tools to
estimate the cash required for ATM replenishment. Postbank
expects the Service Provider to order the most optimal levels
to avoid unnecessary costs of cash funding.
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Contact Centre –
Customer Support
The bidder will provide a contact centre that customers can
contact for queries and dispute resolutions. Postbank requires
remote/online access to the query and dispute logging system
to assist with the management of Postbank customer issues.
Dispute Resolution Postbank expects the bidder to address all customer disputes
within the industry agreed SLAs.
Custodian Training In the event that Postbank might decide to replenish some of
the outlet located ATMs, Postbank will expect the bidder to
provide the outlet custodian with all the relevant training
ATM Monitoring The bidder should provide access to the monitoring system to
enable Postbank to be able to determine the status and
performance of the network at any point.
Reporting and Analysis
- web access provided
to Postbank
The bidder should provide Postbank access to operational and
transactional performance data for reporting and Analysis
purposes.
3.3 Device Types and Functionality
To ensure that Postbank is able to meet all its Financial Inclusion obligations including
provision of banking services to remote rural areas, we propose the deployment of two type
of devices, a non-cash dispensing Self-Service Device and a Low Cost Cash dispensing
ATM. The placement of these devices will be decided on a site by site basis based on
defined criteria including potential transactions, accessibility, security etc.
Device Type Functionality and Placement
Low Cost ATM (EMV
Compliant)
Should have the option to offer up to 4 canisters to be able to cater
for smaller denominations: R10, R20, R50, R100.
Minimum Transactions Required:
- cash withdrawal,
- Balance enquiry,
- Mini Statement
- Prepaid airtime,
- Prepaid electricity
- Card less Transactions (P2P) money transfer
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Self-Service Device (EMV
Compliant)
The SSD has the same look and feel as a cash dispensing ATM and
can perform most of transactions that can be performed on ATMs.
The difference is that it does not have a cash dispenser. When a
customer makes a cash withdrawal transaction, he/she will be
presented with a slip indicating the amount withdrawn. The customer
will take this slip to the merchant to exchange for cash. The merchant
will present these slips to the bank for settlement. The SSD can be
wall or desktop mounted within a merchant environment.
The SSDs are placed in remote rural locations where placement of a
cash dispensing ATM is not logistically possible and no POS facilities
exist. Should mimic the look and feel of a real ATM
Minimum Transactions Required:
- cash withdrawal,
- Balance enquiry,
- Mini Statement
- Prepaid airtime,
- Prepaid electricity
- P2P money transfers
3.4 Deployment Targets
We will adopt a dual ATM Distribution strategy covering both suitable SAPO outlets as well
as offsite site locations at places such as retail outlets, taxi ranks, spaza shops, and petrol
stations. Sites will be assessed on a case by case basis to ensure the most optimal
distribution complementing the SAPO outlet network as well as retail outlets offering cash-
back facilities through the SAPO POS devices. The table below indicates the estimated
deployment targets for the next 5 years.
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2018 2019 2020 Total
Cash ATMs 100 350 350 800
SSDs 50 150 150 350
Total 150 500 500 1150
3.5 Business Non-Functional Requirements
3.5.1 Performance Requirements
Requirement Descriptions
Increase Customer Satisfaction
The ATM network must allow customers to access banking services 24 hours a day, 365 days a year with minimum downtime period for backup and maintenance. A minimum of 96.5% ATM network availability is expected
Transaction Speeds
The Service provider will ensure that the network is configured to ensure that transaction, especially cash withdrawals are completed within industry average speeds.
Expand Product Offerings
The ATM platform should provide facilities for the bank to offer new services and products
User Interfaces The user interface shall comply to the bank’s brand and customer interface requirements
User Friendly The system to be easy to use without a customer going through tutorials.
3.5.2 Security Requirements
Requirement Description
Backup, recovery & business continuity
Both data and software should be backed up periodically, the
frequency of back up depending on the recovery needs of the
application. The back-up may be incremental or complete.
Automating the backup procedures is preferred to obviate
operator errors and missed back-ups.
Recovery and business continuity measures should be in place and
a documented plan with the organization and assignment of
responsibilities of the key decision making personnel should be
produced.
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An off-site back up is necessary for recovery from major failures /
disasters to ensure business continuity. Hot sites or warm sites or
should be available for business continuity.
The business continuity plan should be frequently tested.
Retained Cards All retained cards should be taken to a central point where they are captured and destroyed in accordance to the ATM PCH rules
Card Skimming The Service Provider will constantly monitor and check all ATMs to ensure that no external skimming devices are placed in the card reader to compromise customer card data.
3.6 Risk Management
The deployment of ATMs introduces new risks to the business especially as it relates to deployment at or within SAPO outlets. The following risks have been identified and will be managed between the Service Provider and the respective SAPO departments.
Risk Mitigation
Site Location ATMs will be placed at security assessed and approved sites located at SAPO outlets, retail outlets, Taxi ranks, petrol stations, spaza shops. A risk assessment criteria will be jointly developed by SAPO Risk and the Service Provider. SAPO will have the final say on the approval of sites based on the risk assessment.
Lease Agreements All offsite ATM site leases will be negotiated and agreed directly between the service Provider and the landlord. Copies of the site will be shared with the bank for record purposes. For branch sites (not owned by SAPO) that have been identified as suitable ATM sites, lease agreements/amendments will be negotiated between the landlord and SAPO Properties. In such cases, the Service provider will remove the site rental cost from the monthly fee to be invoiced to the bank. This will also apply to SAPO owned outlets.
Outlet Site Design Each site will be assessed to decide whether placement should be Lobby, Kiosk or Through the wall
Cash Replenishment The outlet ATMs will be constructed in such a way not to have any impact on customers and branch staff.
Outlet Staff Security Risk The placement of branch ATMs will designed to ensure that cash replenishment has minimum impact on outlet staff and
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Outlet Insurance Risk Outlet insurance risk will be re-assessed for all branches where placement of an ATM is earmarked to ensure that the branch is always fully covered.
Forced Access to cash in ATMs through ATM Bombings, Grinding or Tempering
All cash dispensing ATMs will be fitted with SARB approved dye staining technology. The dye stain should destroy the cash in the event of a breach, explosion of excessive vibration.