The Swiss Bankers Travellers Cheque Centre (Swiss Bankers) is based in Grosshöchstetten in Switzerland. Swiss Bankers is involved in the sale of travellers cheques and prepaid cards, the forwarding service of World Money Direct and the development of new payment methods. [1]

Swiss Bankers is a joint venture between various major Swiss banks, a few cantonal banks and agricultural credit cooperatives and American Express.

The core product of Swiss Bankers is the travellers cheque, which is sold under the name Swiss Bankers and American Express Travellers Cheque. In 2002 travellers cheques to the value of more than 20 billion dollars were sold world wide. The high level of security is the main reason why travellers cheques are so popular.

Swiss Bankers has been working closely with American Express since 1995: American Express sells the Swiss Bankers travellers cheque abroad. Swiss Bankers, on the other hand, is responsible for the marketing, distribution and servicing of American Express travellers cheques in Switzerland.

The cheques are sold to travellers by banks and exchange offices; sales commission covers the costs of sales partners for logistics, marketing and other services. The money which is paid in is invested in financial markets to generate profits. The capital yields which are thereby accrued cover the costs incurred by Swiss Bankers for insurance against theft, logistics and marketing. By cashing in the cheque, the traveller receives the money which was paid in and the corresponding amounts are charged to Swiss Bankers.

The core of the observations below is the new product Travel Cash, which is mainly sold via an E-Business solution.

Although Swiss Bankers sells a product which is known worldwide, 30 specialists are sufficient for ongoing business activities thanks to processes which are virtually all automated. E-Business is a subject which affects all employees, as all of them come into contact with IT within the framework of their daily work processes.

At Swiss Bankers, E-Business is perceived as a cross-sectional subject where the marketing department sets the topics and goals and the IT department defines the exact processes. As the Managing Director Thomas Beck also manages the marketing department, the task of coordinating corporate goals with those of the marketing and logistics department is relatively easy. By holding numerous discussions with the individual staff in charge of processes, the logistics manager Charles Kyburz is able to identify possible starting points for making process improvements with IT at an early stage and implement selected tasks in projects.

When the new product Travel Cash was launched, a project team was put together consisting of the managing director, the IT manager and an IT staff member.

As the IT department has too few resources and specialised know-how with respect to the relevant technologies, the external partner Unic Internet Solutions was chosen to implement the project. Responsibility for operating the solution, on the other hand, lies with the internal IT department, which has high levels of protected access to the network of MasterCard, via which travellers obtain their cash at automated teller machines.

Customer needs:
Although travellers cheques still meet a large customer need, travellers are increasingly using credit cards and EC cards for payment and for obtaining cash abroad. The disadvantages of using travellers cheques are the restricted opening hours of banks, unfavourable exchange rates and the lack of transparency as regard the level of commission charged by some banks.

In order to combine the advantages of traditional travellers cheques with the advantages of obtaining cash from ATMs, a new product was created with Travel Cash. The so-called prepaid card is loaded with a maximum of USD 10,000 or € 10,000 prior to departure and can be used worldwide to obtain cash at over 850,000 ATMs 24 hours after loading at the latest.


A new sales platform:
After a successful market test in cooperation with the Berner Kantonalbank (BEKB), it was decided to launch the product on the Swiss market first. In doing so, Swiss Bankers recognised that the existing solution World Money Direct (WMD), which facilitates the sale of foreign currencies, travellers cheques and Travel Cash Cards, is insufficient to help the product achieve the required level of success. Owing to the high level of security for IT solutions required by banks, a throughput time of four to six months is needed to connect a bank to the WMD system as a sales partner. As as many sales partners as possible have to be placed in a situation where they can also sell the new product Travel Cash within a short time, the project group had to look for a solution which would also allow the cards to be sold without WMD.

The result of these deliberations was the decision to develop a highly protected internet platform, in order to be able to complete all processes which are necessary for selling Travel Cash via this system. The platform is intended to make it possible for bank employees, exchange bureaus and other sales partners to credit a required amount on a card and to forward all the information which is accumulated during the process to Swiss Bankers in a structured way. Thus, the sale can be processed automatically and the card can be loaded accordingly. The target group for the solution are primarily smaller sales partners who are are willing to sell Travel Cash without integrating it into their own software solution.

After the project group had drawn up the specifications and the project was put out to tender, Unic Internet Solutions was awarded the contract to develop the platform. The performance targets were worked out within the framework of a jointly implemented detailed concept. Client certificates were for example provided to safeguard the platform. PKI technology ensures that only users with this certificate can access the platform and thus represents an important extension to the conventional user ID and password enquiry. The introduction of cancellation lists or key generators was dispensed with due to reservations about handling and for budgetary reasons. The PKI technology offers comprehensive protection against unauthorised access.

Around five months after the contract was awarded, Swiss Bankers was able to put the pilot scheme into operation with SBB, which was successfully completed after six weeks. Following various smaller additions, the product could be launched at the start of May 2003. In the summer of 2003, 1,200 employees were already registered in the system and card sales have started to reach satisfactory proportions.

With internet technologies, the Travel Cash B2B solution allows the direct connection of sales partners to the banking network of MasterCard. Thus, the sold cards can be released within a short time for worldwide use at MasterCard ATMs (Cirrus) without high level integrated systems such as WMD and the associated maintenance costs having to be taken onboard.

Owners of a Travel Cash Card can view their last transactions via the freely accessible website www.travelcash.ch after inputting their card number and the internet code, thus guaranteeing a permanent overview of their expenditure.

If the totally loaded credit amount is used up by drawing out cash, the traveller can have his/her card reloaded at the nearest sales partner’s premises. An even easier method is for the traveller to call the customer adviser at their house bank, who can have up to USD 10,000 or € 10,000 transferred to the card holder’s card in accordance with previously agreed authorisation.


Figure 1: Linked business processes

The E-Business solution makes economic sense for Swiss Bankers for various reasons:

On the one hand, it would not have been possible to accumulate a maximum number of sales partners within the shortest possible time without Travel Cash B2B, as the alternative solution World Money Direct would have caused too long a lead times. On the other hand, Swiss Bankers can also achieve concrete cost benefits in addition to this marketing advantage, as the costs for connecting sales partners are only minimal.

Thus, a throughput time of three to five months for connecting sales partners is considered realistic via the WMD application. The costs which this incurs of between CHF 30,000 and 50,000 must be borne in full by Swiss Bankers.

On the other hand, with the aid of Travel Cash B2B, a sales partner can be connected by Swiss Bankers within one week, or in extreme cases within hours. As an application was also developed within the project which allows client certificates to be issued to employees of sales partners, Swiss Bankers can open accounts for clients without any assistance from third parties and authorise users. The costs of connecting a new sales partner therefore correspond to the time expenditure of Swiss Bankers employees. In addition to the cost savings for connection, Swiss Bankers also benefits from low operating costs, which are significantly less than the costs of actively serviced high security connections to banking networks, even with a highly protected internet server.

The current solution already allows over 1,200 employees from several sales partners to sell and load Travel Cash cards. Nevertheless, the development process is not over, as Swiss Bankers is endeavouring to increase the flexibility of IT systems and reduce costs. As the business cycles for marketing products are also getting shorter and shorter, the pressure to achieve a fast return on investment is growing.

The conceivable use of the system outside Switzerland will make extra demands on the solution. Thus, other billing processes are possible, for example. Other currencies are already envisaged. The user interface which is currently available in four languages could also be easily complemented with additional language variants. Marketing targets could also result in the co-branding of the user interface one day, should a foreign bank wish to sell the Travel Cash product under its own name.

The current developments on the other hand are especially directed at increasing user-friendliness, in order to make it as easy as possible for sales partners’ employees to sell the card. New functions which are for example intended to enable the serial processing of credit notes are also progressing along these lines. This would, for example, make it very easy to cope with the reimbursement of expenses on Travel Cash cards through personnel administration.

Travel Cash cards will definitely not be sold to end users via the internet in the foreseeable future. The reason for this is the fact that the sale of financial products requires highly protected connections, which are, however, not available at affordable prices at present. As end users will not be prepared to pay the 5% commission instead of the customary 0.5 per cent, a sale by credit card or something similar is also unthinkable.

A real increase in the benefits of the Travel Cash product could instead by achieved by connecting the loading process to the E-Banking applications of major banks. The traveller could then transfer cash from their bank account to the Travel Cash card by mouse click via the internet. With the Travel Cash card they could then obain cash on favourable terms from the ATM in the national currency.

In this situation, the traveller could directly experience the advantages of the relevant E-Business solutions and benefit from them.

The use of internet technologies allows Swiss Bankers to concentrate on acquiring sales partners for the new product Travel Cash, as the technical connection of sales partners to the Travel Cash B2B extranet does not require an individual integration projects. This important advantage also leads to concrete cost savings in addtion to an accelerated market development.

The tests which have been carried out by external experts have clearly shown that internet technologies which are available today are well suited to completing crucial business processes via the internet with the appropriate protection. By using technology in a well-targeted way, Swiss Bankers is managing to reduce the costs of its systems despite increasing flexibility and is therefore be able to use the benefits of its products to maximum effect.

[1] This case study is based on an interview between the authors and Charles Kyburz dated 12 June 2003.