Wiser before the event
Hollywood has a way of making everything seem like an overnight success. The reality of business away from Tinseltown is very different, though. It can take months — sometimes years — of hard work, persistence, dedication and the right support to become an overnight success.
I have just returned from a three-day workshop with a client who would like to modernize their national retail payment infrastructure. The idea of steady preparation is certainly relevant to this undertaking. There’s no denying that this is a massive project. But the right technology partner can help cut project time, cost and complexity. In short, help you to be wiser before the event.
In the beginning…
Launching a national retail payments system involves a lot of pre-work before the request for proposal (RFP) stage. If you are looking to move the market, buy-in from key market stakeholders is essential. This includes central, retail and commercial banks. But also non-banks, such as start-ups, mobile network operators, large retailers, consumer groups and so on.
Buy-in is just the beginning, though. The first time participants start discussions, each of them will have a different understanding of the requirements and how things should be done. I can almost guarantee it. Everyone wants to protect their existing business models and customer base. One of the first major obstacles for any national payment project is getting everyone to sit around the table and agree.
Tieto can help sell in the idea of a national retail payment system into participants. We also have experience of facilitating discussion forums to agree requirements and build business cases. We did this with Siirto in Finland, the real-time, multi-bank platform for mobile payments. Tieto also is able to advice on technical, infrastructure, processes and other important areas. For example, we are closely working with Swish, an instant-payments scheme in Sweden, to help them develop the service further. This is in addition to a number of other countries where we have built retail national payments infrastructure solutions, including a first true real-time inter-bank payments system in East Africa – PesaLink in Kenya – which has recently won an “Emerging Patments Award” in “Best Banking Initiative” nomination.
Rules and rails
Another massive up-front task is drafting the legal regulations on how things will work. The rule book details how institutions participate in the ecosystem, how transactions are processed, disputed, cleared and settled. Countries can buy this in or create it from scratch. Either way, Tieto can help with this and the next stage.
The rule book helps inform the technological architecture. That is to say, how the central infrastructure will run. How the banks will connect to the system. How the messages will be processed, using what protocols. How technology can work around older systems, which do not support real-time 24/7/365 processing.
The technical standards in turn inform the hardware and software requirements. Plus, the investment required, supporting processes and end-user propositions. So, while everything pre-launch seems miscellaneous, it is connected.
Connect it right and it makes for maximum take-up post-launch and strengthens the network effect for service providers and end-users. This very quickly becomes a virtuous circle — and the overnight success that markets have planned and worked hard for.
How Tieto can help
Tieto has worked with central and retail banks, banking associations and service providers in several countries on national retail payment solution projects. Besides providing software technology that powers payments, we also have a range of advisory services for those considering building or re-platforming national retail payment systems. For client references or to find out more, please contact me Edgars Bremze, Senior Offering Manager