Selection and contracting of cards acquiring processing and terminal services provider
Introduction
Albert Czech Republic acts as the strong market leader with a retail network of 350+ supermarkets and hypermarkets. They are a part of the Ahold Delhaize Group, a leader in supermarkets and e-commerce, and a company at the forefront of sustainable retailing. The Ahold Delhaize family serves more than 50 million shoppers each week in 11 countries.
Background
Albert Czech Republic was looking to challenge the current cards acquiring infrastructure (including processing and terminals) to improve cost efficiency as well as reliability and business continuity. A cost efficient and reliable cards infrastructure is critical to Albert as payment cards represent a large and increasing share of the total yearly turnover. Moreover, Albert considers a reliable payments infrastructure to be critical in maintaining high customer satisfaction. Through its 350+ retail locations across the Czech Republic, Albert acts as a strong market leader in Czech retail and processes millions card transactions every week. Card volumes are projected to grow double digit every year in Czech Republic.
Albert Czech Republic contracted Payments Advisory Group (PAG) to run this RFP process on their behalf.
PAG acted as project manager, subject matter expert in IT infrastructure, cards acquiring and terminal services and financials. PAG also acted as th single point of contact towards all contenders throughout the entire process.
Evaluation of the case
PAG worked remotely on this assignment, driven by cost-efficiency and Covid-19 travel restrictions. The cooperation was based 100% on success fee, creating a joint effort to improve cost efficiency as well as reliability and business continuity.
After initial evaluation of the relevant current IT infrastructure for cards processing, a requirements document was drafted which also included recommendations from this infrastructure audit.
Contender Selection criteria:
- Cost efficiency measured against competitors and established baseline (current total cost level against anticipated transaction volumes and terminal estate). This was the primary selection criterium if other must-have requirements are met
- Technical requirements for terminals & card acquiring processing; captured in detailed RFP questionnaire indicating must-have requirements to be met in order to be eligible to progress in the selection process
- Maintenance & Service levels
From an initial longlist of over 40 potential contenders a shortlist of 10 contenders was drafted, following agreed selection criteria and PAG-Albert alignment. After a thorough analysis of all the data and through a phased selection 3 contenders were left.
Solution
After final interviews, presentations, and negotiations, a winner was selected and a new contract was awarded to CSOB.
In addition to realizing the project’s main objective, PAG recommended to discuss near future technical solutions with appointed contenders on further potential cost savings and customer satisfaction improvements.
Project summary
• Duration: 6 months
• Total Contract Value: > €25M
Result
• New contract with improved IT infrastructure and service levels
• Cost efficiency realized: ±7% against baseline
• Project run within planned timelines
• Client evaluation (out of 10):
Project: 9
Cooperation: 10+
Quotes
Some quotes from contenders who did not win the contract:
“It was absolutely a pleasure working with Payments Advisory Group and we appreciate your open communication, transparency and professional approach at every phase of the process.”
“We appreciate the support Payments Advisory Group has provided us since the beginning of this RFP and – We are looking forward to any future cooperation!”
“Probably this is the nicest email with bad news I have ever received 🙂
Any way, thank you very much – It was really pleasant cooperation with all of you and I hope we keep in touch”
“Thanks for being supportive during this RFP process.”
“I appreciate your professional approach in the course of RFP. Thank you and your team for that!”