Card Readers and Online Banking:

Ten top tips for their successful introduction

Based on the experiences of Barclays, Nationwide and NatWest customers

By M. Pavan and C. Wassell of Mapa

April 2009
 C Contents

A. Introduction p.3
B. 10 Top Tips p.5

1. Was it easy or difficult to use for the first time? p.6

2. What makes it easy to use for the first time? p.7
3. What changes / improvements would they make? p.8
4. Has it ever failed to work, and how was the problem resolved? p.8
5. How many payments have customers set up? p.9
6. Has it given customers more confidence when banking online? p.9
7. When did customers set up their last payment with the card reader? p.10
8. Will customers use the online banking service more often? p.10
9. Where do customers keep their card readers? p.11
10. Are customers more likely to recommend their bank? p.12

11. Appendix: Methodology and list of questions p.13

12. About Mapa p.14

13. Contact Details p.15

April 2009 – Page 2 © Mapa

 A Introduction

This document examines the key differences between the experiences and attitudes of Barclays, NatWest and Nationwide
card reader users as they come to terms with their introduction and continued use.

What is a card reader?

A card reader is a hand held device used to authenticate users and transactions in online banking. The device has a slot for the user’s bank
card, a decimal keypad and a display. When using online banking the customer is instructed to insert their bank card into the reader and enter
their PIN, a number will then be displayed on the reader’s screen which must be entered on the website

Why have card readers been introduced?

The APACS statistics speak for themselves; online banking fraud across all UK banks has jumped by 132% in 2008 to stand at a record
£52.5m. Never has fraud prevention been more important for banks.

When Barclays introduced its card reader in late 2007 it was the first among the traditional high street banks to do so, using the reader for both
account login and new payment creation. Shortly afterwards, NatWest and Nationwide introduced card readers, opting to use them for new
payment creation only. As a result of introducing card readers, each of these banks have considerably reduced levels of fraud.

April 2009 – Page 3 © Mapa

 A Introduction (Cont’d)

From a consumer perspective however, the increased protection comes with a price. Card readers add a layer of complexity and inconvenience
to the overall online banking experience that was not there before. This could conceivably undermine the extensive efforts made by banks to get
customers online.

It is with this in mind that Mapa commissioned a comprehensive research program to be conducted amongst active card users at Barclays,
NatWest and Nationwide. The key research objective was to understand how internet banking customers’ usage and attitudes had been affected
by the introduction of card readers.

Topics researched included:

• How difficult customers found using the card reader the first time and why
• How many payments had customers set up and how long was it since they had used their card reader
• What changes or improvements would customers make to the card reader
• Where customers keep their card readers and what they had done if it had failed
• Whether the card readers had given customers more confidence in online banking and lead them to use online banking more often
• Whether customers were more likely to recommend their bank to friends as a result

For the full list of questions that were asked, please see the Appendix on page 13.

April 2009 – Page 4 © Mapa

 B Summary: Ten top tips
The research findings show unequivocally that successful deployment of the card reader has directly contributed to greater customer advocacy and
more positive recommendations. Whilst this research deals specifically with card readers it may be used for more general application in successfully
managing online innovation and technological changes

Mapa’s ten top tips are:

1. Explain the benefits: Customers that understand why they are using it are more likely to support it

2. Be positive in communicating that the card reader is easy to use: Customers will become stronger advocates

3. Make the instructions easy to follow: You can’t afford not to

4. Make it for log-in as well as payments: Customers will to be positive about it and use it more

5. Battery replacement: Have a clear plan for how this is done and communicate it to customers

6. Attractive design: If it is aesthetically pleasing, customers are more likely to like it

7. Ensure that the reader has big buttons: User friendly

8. Make the reader portable : Easy to carry around

9. Allow customers to request two readers: Home and away

10. Prepare your contact centres for an increase in calls: Customers will ring you up

April 2009 – Page 5 © Mapa

 1 Was it easy or difficult to use for the first time?

T otal
On the question of how easy or difficult users found the card
reader to use for the first time
T otal 302 301 300 903
Easy 276 262 282 820
• Only 1 in 10 Barclays customers found it difficult, fewer than
Natwest where 13% had problems 91% 87% 94% 91%
Difficult 26 39 18 83
• Twice as many NatWest customers than Nationwide customers 9% 13% 6% 9%
found it difficult

NatWest Barclays • A supplementary question at the end of the survey gave respondents the
(11) (14) opportunity to provide any further comments

• Nationwide customers were twice as likely as Barclays customers to

describe the card reader as ‘easy’ and three times more likely than NatWest
customers
Nationwide
(29)

Base: 54 respondents

April 2009 – Page 6 © Mapa

 2 What makes it easy to use for the first time?
On the question of what it was that made the card reader easy to use or not, one comment clearly dominated from the responses
given:
• Clear instructions

Nationwide shows how it should be done

Although the card readers work in a similar way with each bank, Nationwide customers found theirs the easiest to use:

• Respondents cited clear instructions as being the main reason for this; Mapa also believe that the way the initial launch of
the card readers were communicated is an important factor

• Highlights from the letter that accompanied the delivery of Nationwide’s card reader include clear headings, straightforward
explanation of why it is being introduced / how it works, where to go for additional information

• Also note prominent ‘stamp out fraud’ logo which helps communicate the purpose of the card reader

Nationwide’s letter that accompanied

delivery of the card reader (April ‘08)

April 2009 – Page 7 © Mapa

 3 What changes / improvements would they make?
On the question of what changes or improvements customers would make to their card readers the four most commonly
suggested enhancements were:

• Be issued with two card readers

• Smaller size

• Spare batteries

• Bigger buttons

4 Has it ever failed to work, and how was the problem resolved?

• Around 10% of respondents reported that their card reader had failed to work

• It fails twice as often with Barclays customers than for either NatWest or Nationwide (NB. Barclays also use the card reader for
login (and not just payments), therefore customers may have experienced problems with site login not necessarily as a result of
the card reader)

• To resolve the problem, customers either call the bank by telephone or try again

April 2009 – Page 8 © Mapa

 5 How many payments have customers set up?
It is evident that Barclays customers, who use the card reader to log in as well as to make payments, have set up significantly
more payments than either NatWest and Nationwide:

• Barclays users have on average set up over 4 payments each. Nationwide just below 4 and NatWest near 3.5 on average per
respondent

• Barclays users have performed around 20% more transactions than their competitor peer group

6 Has it given customers more confidence when banking online?

With clear instructions and regular use Barclays and Nationwide customers are increasingly confident about banking online:

• Only two thirds of NatWest customers feel the card reader gives them more confidence when banking online compared to ¾ of
both Barclays and Nationwide

T otal

T otal 302 301 300 903

More confidence 231 187 218 636
76% 62% 73% 70%
Less confidence 5 16 5 26
2% 5% 2% 3%
No difference 66 98 77 241
22% 33% 26% 27%

April 2009 – Page 9 © Mapa

 7 When did customers set up their last payment with the card reader?
The theme of confidence is translated into more frequent use by Barclays and Nationwide customers:

• NatWest users have not used their card readers for 7 weeks whereas Barclays and Nationwide users have been active in the
last month

• Barclays and Nationwide customers are twice as active as NatWest customers

8 Will customers use the online banking service more often?

Barclays customers, who also log in using their card readers, are most likely to use online banking more often:

• Nearly a third of Barclays customers say they will use online banking more often whereas less than 20% of NatWest and
Nationwide customers will

T otal

T otal 302 301 300 903

More often 88 57 55 200
29% 19% 18% 22%
Less often 19 19 18 56
6% 6% 6% 6%
No difference 195 225 227 647
65% 75% 76% 72%

April 2009 – Page 10 © Mapa

 9 Where do customers keep their card readers?

Barclays customers, needing the card reader to access online banking as well as authorise payments, are more likely to carry it
around with them as a result:

• Nearly all of the respondents kept their card reader at home

• 1 in 10 Barclays customers carried the card reader with them, nearly three times as many as either NatWest or Nationwide

T otal

T otal 302 301 300 903

Home 254 273 272 799
84% 91% 91% 88%
W ork 14 9 7 30
5% 3% 2% 3%
Carry it around 31 13 11 55
10% 4% 4% 6%
Other 3 6 10 19
1% 2% 3% 2%

April 2009 – Page 11 © Mapa

 10 Are customers more likely to recommend their bank?

T otal

T otal 302 301 300 903

The attitudes and experiences of customers are, not surprisingly,
reflected in their propensity to recommend their bank: More lik ely 142 100 128 370
47% 33% 43% 41%
• Only a third of NatWest customers would recommend the bank to Less likely 12 16 9 37
friends or relatives, whereas just under half of Barclays and 4% 5% 3% 4%
Nationwide customers would
No difference 148 185 163 496
49% 61% 54% 55%

This can be seen even more clearly in the nature of the

60 spontaneous customer comments:
Advocates

50 Enthusiasts • NatWest has half the number of spontaneous

Number of respondents

Supporters
enthusiasts and advocates compared to Barclays and
40 Nationwide

30 • Both Nationwide and Barclays have 25% more

spontaneous positive comments in total than NatWest
20

Respondents were categorised by the type of wording that they used when
10 describing their card reader:

Advocates: Excellent / superb

0
Enthusiasts: Very pleased / Very happy / Really good / Great
Nationwide Barclays Natwest Supporters: Good / Like / Works well

April 2009 – Page 12 © Mapa

 11 Methodology and list of questions
Methodology

300 online surveys were completed with customers of Barclays, Nationwide and NatWest (ie. 900 surveys in total) during January 2009.

Respondents were all active internet banking customers, ie. Login at least twice per month.

Questions

Q1. Approximately how many new payments have you set up using your bank’s card reader?
Q2. When did you last make a new payment using your bank’s card reader?
Q3. When you made a new payment using the card reader for the first time, did you find it easy or difficult to complete?
Q4. What made it particularly easy / difficult to complete for the first time?
Q5. What would you change to make it easier when using the card reader when making a new payment?
Q6. Does using your bank’s card reader give you more confidence when banking online in relation to the security of your account?
Q7. Will making a new payment using the card reader make you use online banking more or less often, or will it make no difference?
Q8. After setting up a new payment using the card reader, are you more or less likely to recommend your bank to friends or relatives?
Q9. Where do you keep your card reader?
Q10. Has your card reader ever failed to work when making a transaction?
Q10b. If YES: How did you resolve the issue?
Q11. Are there any comments you would like to make on your bank’s card reader system?

All questions were multiple choice, with the exception of those indicated by italics.

April 2009 – Page 13 © Mapa

 12 About Mapa
About us
Mapa specialise in online and mobile
retail financial services research. We
have a global reach and are expects in
our field. We provide a range of services
including:
• Competitor Analysis
• Competitor Dashboards
• Consultancy Services
• Insight Reports
• Mystery Shopping
• Research Credits

Contact us for more details

• Ross Methven
• Head of Operations
• ross@mapa-uk.com
• +44 (0) 20 7727 3130

Subscribe to our feeds

Keep up to date with what is new in
online and mobile financial services.
Visit www.mapa-uk.com

April 2009 – Page 14 © Mapa

 13 Contact Details

Key contacts:

Mark Pavan
managing director
mark@mapa-uk.com

Mapa Ross Methven

73 Princedale Road head of operations
London ross@mapa-uk.com
W11 4NS
UK
Elsabeth van Overbeeke
www.mapa-uk.com internet research consultant
elsabeth@mapa-uk.com

t +44 20 7727 3130

f +44 20 7229 4713
e contact@mapa-uk.com Niklas Olsson
internet research consultant
niklas@mapa-uk.com

Claire Wassell
internet research consultant
claire@mapa-uk.com

April 2009 – Page 15 © Mapa