EXCLUSIVE INTERVIEW OF THE EXECUTIVE DIRECTOR OF ARMENIAN CARD PAYMENT SYSTEM ISHKHAN MKHITARYAN TO ARKA NEWS AGENCY:

ARKA – Mr Mkhitaryan, what technological solutions and programs did the Armenian Card implement in 2014?

I. Mkhitaryan – In 2014 we have fully completed the certification works for 3D Secure transactions for Visa and MasterCard, and today the Internet payments are carried out through 3D Secure technology. The acquiring part, i.e. registration of online sale outlets using the new technology, was launched back in December 2013. Before the mentioned technology was introduced, the online shops registered within our system could accept payments exclusively through “virtual cards” (a product offered by our system) and MasterCards, whereas now the registration is possible without “virtual cards”, using MasterCard, Visa or ArCa. Registration of a shopping outlet through this technology protects from unjustified chargebacks.

In 2014, all measures related to issuer’s part were completed, which means if the bank issuer that is a member of our system has activated this services for MasterCard and Visa, then its card holders will see the “Send Password” button, while paying on different websites. Pressing it they will get an sms with one-time password on their mobile phone registered with the bank. Then putting the password into the required field, the cardholder makes the payment.

I want to mention that works are under way to ensure payments also through other payment system cards we offer services for. The 3D Secure technology provided a completely new security level for payments with cards issued within our system and secured cardholders against unauthorized access to their card data.

Let me remind you that this technology gets the issuing bank involved in the purchase process. The cardholder is always checked for identity while making the payment through 3D Secure technology. First, the vendor requests the client to provide his card details and then, transfers the information and the payment amount to the respective payment system (Visa, MasterCard, and etc.), which, in turn, passes the data on to the card issuing bank that provides its secured website link for an additional checkup in response. The software of the online shop opens this website for the client in a separate web-browser window. The client needs a password for identification (which is sent through sms in this case), and he is the only one knowing this password. This way a secure communication channel is established between the client and the issuing bank, with no access for vendor or anybody else in the Internet. The issuing bank verifies the cardholder and receives his authorization for the transaction. Only after that the transaction is carried out on the vendor’s website. This means the card number is not enough for making a payment.

ARKA – Have there been any other innovative solutions implemented in the system?

I. Mkhitaryan – Large efforts have been made to modernize and enhance the efficiency of communication with banks at technical and technological levels, including the efficiency measures for file exchange, automation of many technological processes, which was impossible in the old system and used to hinder many processes. This, no doubt, has finally had an impact on cardholders, particularly in terms of rapidity of crediting the account from the moment of the bank trasnactions. This time span has reduced considerably. There are already some systems that enable crediting the account in a limited period of time.

It should be also noted that a special module has been used since the new system was introduced in 2013 to prevent fraudulent transactions. Based on the rules and the scenarios developed by each bank the system detects possible fraudulent transactions and can both warn the bank of possible fraud and cancel the transaction amid authorization, depending on the settings picked by the bank itself.

The participating banks are actively using this instrument to protect both their cardholders and merchants from intruders.

We also have a new project on information kiosks, for which certification and testing was completed in 2014. I believe the bank that initiated this project will start soon developing a network of information kiosks. It will be a terminal that both accepts and gives out cash, and is equipped with a touch screen for self-service. This means, money can be deposited, payments against public services and loan payments can be made, fines can be paid, and etc.

Another thing to be mentioned is the completion of certification for contactless Visa cards. As a technology provider, we have finished the works, and the system, in fact, is ready for launch and for Visa Pay Wave contactless card services.

ARKA – What exactly this system looks like?

I. Mkhitaryan – In fact, the trend is that eventually this will become the next development stage after chip cards. The term speaks for itself. In using a contactless card there is no need to insert the card into an ATM or POS terminal reader. Waving a card is sufficient for an account chargeoff. The technology gives a chance not to use cards as an instrument anymore for accessing the bank account. There are already watches, fobs and other accessories designed with built-in chips.

ARKA – What are the advantage of contactless cards?

I. Mkhitaryan – The high speed of transaction processing is said to be the key advantage. Usually, contactless terminals are installed in places where small fixed amounts are charged off, particularly in public transport, or where long queues are common, but where the amount is still not large for inserting the pin code or signing on a check. Today these terminals are put in fast food chains, public transport, museums, coffee machines, and etc. The payment process is getting much simpler and faster – you just pass by, wave the card and make the payment.

ARKA – What were Armenian Card’s performance results at the end of the year?

I. Mkhitaryan – As of April 1, 2015, there were 1,619,167 active cards of the member banks used within Armenian Card payment system, including 728,567 local cards and 890,600 international cards. Some 54,959 cards were issued in April, including 26,750 local cards and 28,209 international cards.

Number of active “virtual” cards in the system was 33,759 as of April 1, 2015.

There were also some 5,405 service outlets, 6,201 POS terminals and 1,036 ATMs in the system as of the beginning of April.

Let me mention also that in the period from April 1, 2014, to April 1, 2015, a total of 18,111,813 transactions were processed within the system worth a total of about 900.4 billion drams. Of them, 7,366,578 transactions for a total of about 347.2 billion drams were carried out through ArCa cards, 4,060,045 transactions amounting to a total of about 189.7 billion drams through MasterCard and some 6,685,190 transactions were processed through Visa (worth a total of about 363.5 billion drams). N.V. -0-