August 18, 2005

Background:
The UK Post Office has one of the largest retail networks in Europe, with over 18,000 urban and rural locations throughout the UK. The Post Office has been the designated point of disbursement for State benefits and pensions for over 16 million people. In 1999, the UK government took the decision to move from a voucher to cash based benefit payment system to Automated Credit Transfer “ACT.” The electronification of benefits payments evolved into the provision of Universal Banking Services by the Post Office. UBS provided benefits recipients access to their funds at the Post Office through either a Post Office Card Account (POCA) or a basic banking account provided by one of many participating private retail banks.

Over 4 million participants received Magnetic Strip cards at the start of the program. In compliance with the UK government CHIP and PIN mandate, the original Magnetic Stripe cards were to be replaced with Smart cards by the end of 2005. This also meant that the entire electronic infrastructure that was setup initially by the Post Office required enhancements to accept and process Smart cards.

Solution:
Having been the “trusted third party” test solution for the Post Office in the implementation of the initial mag-stripe based electronic payment solution, Lexcel was asked to provide a test system to validate the migration to Smart Cards. As the Post Office’s electronic payment infrastructure is a multi-vendor solution, Lexcel was required to provide testing applications and benchmarking services for both the card-acquiring and card-issuing vendors.

While the changes required were considerable, some of the more notable ones involved changing the transaction message format (POCA ISO), creating new smart cards, building and populating new account databases, adding new encryption software and hardware, new POS terminals, and balancing Host hardware and communications infrastructure.

For the vendors on the acquiring side, Lexcel provided POCA and LIS5 Issuer test systems for functional testing. Acquirers sent the Lexcel Issuer test systems authorization transactions with Chip card data and Application Request Cryptograms (ARQC), the Lexcel systems validated the accuracy of the request messages and sent Issuer responses including Application Response Cryptograms (ARPC) back to the acquirers.

For the vendors on the issuing side, Lexcel provided the POCA and LIS5 Acquirer test systems for functional testing. The Lexcel Acquirer test systems provided the Issuers with the ability to receive properly formatted Chip transactions to process. The Lexcel systems also validated the Issuer responses for format and encryption accuracy. In addition, the Acquirer test systems were used to regression test the new code to ensure that Mag Stripe cards were still being processed during the migration to Chip.

The third component of the testing deliverable for the Post Office comprised of benchmarking and stress testing the new Chip infrastructure. Lexcel TestSystem CAPSystem (CAPSystem) was used to benchmark the upper limits vendors’ systems based on a transaction mix of 100% mag-stripe cards, 50% mag-stripe/50% Chip cards, and 100% Chip cards. CAPSystem exchanged millions of mag-stripe and Chip transactions to exercise the Hosts’ communications protocols, encryption hardware and software, applications software, database software, CPU and disk performance, and memory allocation. The end result was a Chip ready infrastructure optimally configured to support Chip cards.

The sophistication of Lexcel software and experience with Chip technology were important factors in being put in the position of a “trusted third party.” As the neutral monitor of the environment Lexcel worked very effectively with all the vendors and the UK Post Office, the main governing body overseeing the project.