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The UK's 13th largest building society has signed a contract with application service provider Nomad Software to provide the IT infrastructure to allow it to enter the card payments market for the first time.
Colin Greaves, general manager at Newcastle Building Society, said the application service provider-based service offered by Nomad proved cost-effective for the building society to issue debit cards as it extends its financial product portfolio.
"It is very expensive to run your own debit card [system] as it requires major infrastructure," he said, but added that this was something the society was not prepared to invest in.
Greaves expected integration of the service into the society's existing IT infrastructure should pose little problem for the team of 40 IT staff at Newcastle Building Society.
"We have the basic administration in place. It is fairly easy to take a transaction feed," he said.
The society had already implemented real-time transaction feeds via its internet account which takes a feed from Fidelity Investments. "This is a logical extension of the infrastructure already in place," Greaves said.
When it is introduced later this year, the debit card service will enable Newcastle to issue MasterCard's Maestro card to its customers.
Debit card transactions from Nomad will be fed using web services into the building society's infrastructure, which runs on Windows 2000, Windows 2003 and Microsoft SQL Server.
Greaves said the plan was to migrate onto Microsoft's .net architecture, which supports the development of a web services-based infrastructure.
He expected the link to Nomad to be achieved over a virtual private network, although no decision had yet been made on network connectivity.
Through the agreement with Nomad, Greaves said Newcastle Building Society would be able to provide debit card services to other building societies, effectively acting as a reseller of the Nomad service.
The Nomad service, called Cortex, runs at an IBM-hosted site. The service manages card production, personalisation and Pin mailers to customers.