As the demand for immediate payments implementation grows in the United States, Iliad Solutions have identified one of the largest risks to face the payments industry over the next few years. Iliad’s CEO, Anthony Walton, has 25 years of experience testing payment systems and believes that the pace of change is presenting increasing risk to organisations dealing with payments. He explained:
“I have never seen as much innovation as we have experienced over the past two years in payments. Integration is one of the biggest challenges facing the industry. If you are layering dynamic new developments on top of legacy systems, you need to make sure that the system still works from end to end, and not just the newly added component.”
UK banks have experience in launching Immediate/Faster Payments. Faster Payments launched in the UK in 2008 and involved all the major UK banks linking to a central scheme operated by Vocalink. This scheme provided a basic certification service, allowing banks to validate their set up prior to going live. It included a number of checks to certify that participating banks interacted with the system as expected, but didn’t address their genuine testing needs.
As the process moved forward it became clear that banks would have trouble completing the pre-testing work required for certifying newly set up solutions, whether product based or developed in-house. The market needed both functional testing and performance components to ensure that systems were able to process messages correctly, and that they had the capacity to support the expected transaction throughput of over 400 per second.
To meet this need, Iliad developed a specific version of its software and used its experience to support banks preparing themselves for the service launch and beyond. This system was modelled specifically for Faster Payments, supporting inbound and outbound messages and providing a comprehensive simulation of the central infrastructure. It has since been licensed by 90% of the banks connected to the system.
“Immediate payments is another initiative that IT organisations have to consider, where there is even less scope for error within the tiny margins in which our industry is expected to operate. Organisations in the US need to look at their market readiness plans differently from how they have previously,” Walton said.
He believes that all developers need to:
- Be prepared for spikes in transactions, because individuals are often suspicious of the concept of immediate payments, and check and double check transfers and postings.
- Ensure the full end-to-end transaction process across their institution is proven, and that they have stress tested the environment beyond projections. They should also make sure that its foundations can genuinely cope with the likely take up.
- Be prepared for how quickly immediate payments will move from the novel and untrusted to an accepted standard, creating an expectation that will become a measure of client satisfaction. The reliability of the processing platform will be critical.
- Ensure that the customer journey is seamless and consistent, and not to launch until that journey is operating smoothly.
- Make testing central to plans from inception, not an afterthought, as no bank wants to be the bank in the news. Social media channels will be delighted to expose those whose systems couldn’t cope and whose management weren’t prepared.
Iliad are currently speaking to several banks and processors in the US with a view to offering consultancy or supplying their virtualised testing platform for payments. Erik Wulfers, US Business Development Director, explained their interest in Iliad’s solutions:
“The people we have talked to in the States so far have been impressed with how rapidly problems can be identified and fixed. This means the speed to market for payment projects is increased and the development time and costs of new initiatives can be reduced. The test results can be viewed by anyone with access to the system across the world so sharing of data is streamlined and simple.”
To support the increasing demand for Iliad’s services they have recently opened a new office in Dallas, Texas, to provide local support for their new customers.
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