Post on 18-Dec-2015
© Copyright 2011, Fundtech Ltd. All Rights Reserved.
Low Value Payments & Payments Hub
Session: With the growing volume of low value payments in Asia, the search for
interoperability continues
Gil Gadot– EVP & CTO, Managing Director APAC
8th April, 2011
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Low value payment – traditional definition
The “new” low value networks
SEPA /FPS/MAMBO
Interoperability mobile/Web/EIPP
Payment Spider Web
Payments HUB topology and benefits
Topics
© Copyright 2011, Fundtech Ltd. All Rights Reserved.
Relatively low denomination payment Delivered and processed in a batch Non-urgent Cleared and settled over 24-72 hours Domestic & Single Currency Revocable Low care – i.e. no repair Rejects are asynchronous Examples: ACH, BUCS, SEPA, GIRO B2B B2C
Low Value Payment – Traditional Definition
© Copyright 2011, Fundtech Ltd. All Rights Reserved.
Not necessarily low denomination payment Delivered and processed as batch or single payment Non-urgent Cleared in 15 seconds and settled over 24-72 hours Domestic & cross border Web & mobile friendly Revocable Low care – i.e. no repair Rejects are asynchronous UK FPS, CNAPS 2, MAMBO… B2B B2C P2P
Low Value - New Networks
NATIONAL MARKETS
LOCAL CLEARING SYSTEMS
IRIS
ELLIPS
TOP
TBF
SPGT
RTGSplus
BI-REL
SLBE
CHAPS Euro
ARTIS
HERMES
FRANCE
GERMANY
BELGIUM
SPAIN
PORTUGAL
ITALY
-GREECE
AUSTRIA
IRELAND
LUXEMBOURG
NETHERLANDS
FINLAND
ACH
RTGS
RTGS
ACH
ACH
RTGS
RTGS
ACH
ACH
RTGS
RTGS
ACH
ACH
RTGS
RTGS
ACH
ACH
RTGS
RTGS
ACH
ACH
RTGS
RTGS
ACH
TAR
GE
T ‘
INT
ER
LIN
KIN
G N
ET
WO
RK
’
LINKEDRTGS
EU
B
AN
KS
SINGLE REGIONAL NETWORK
RTGS(TARGET 2)
EU
B
AN
KS
ACH NETWORK(SEPA)
NET SETTLEMENT(EBA EURO1)
NET SETTLEMENT (EBA Euro1)
Disparate National Infrastructures Single Pan-European Infrastructure
PE-ACH CSM
PE-ACH CSM
NON-PE-ACH CSM
NON-PE-ACH CSM
INTER-OPERABLE NETWORK
by 201x
Europe - TARGET EBA SEPA Simplification of Market Infrastructures
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Faster Payments - UK
Central Infrastructure
Central Infrastructure
Member –Direct SenderSubmitting member
Sending FPS institutionOriginating Credit Institution
Member –Direct SenderSubmitting member
Sending FPS institutionOriginating Credit Institution
Member –Direct ReceiverSubmitting member
Sending FPS institutionOriginating Credit Institution
Member –Direct ReceiverSubmitting member
Sending FPS institutionOriginating Credit Institution
Bank of England
Corporate - DCACorporate - DCA
Direct Agency - SenderDirect Agency - Sender Direct Agency - ReceiverDirect Agency - Receiver
Originating Credit Institution
Originating Credit Institution
Beneficiary Credit Institution
Beneficiary Credit Institution
Third Party Beneficiary –Direct Receiver
Third Party Beneficiary –Direct Receiver
Members are the 13 UK banks, which agreed to meet scheme’s membership ruleDirect Agencies are sponsored by Members, who take full responsibility for them in FPS Corporates are customers of Members or AgenciesOCI’s and BCI’s (aka Indirect Agencies) are sponsored by a Member and communicate with FPS via a MemberSIP Clears in 15 seconds
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1. Bill Presentment and Payment – allows electronic delivery of bills to a customer’s internet bank, with seamless integration with BPAY payment functionality
2. Payment Request and Payment – similar to above, in summary transaction form. More suitable for repeat or ad-hoc payment arrangements or schedules thereof
3. Person-to-person Payment Request and Payment – enables address holders to request and receive payment in real-time without disclosing BSB and account number
4. Payment With Advice to Address – delivery of remittance information with payment to address
5. Real Time Notification with Payment
6. Non-Value Items Delivery – delivery of documentation or commercial communications
7. Online Payment – initiating and authorising an online payment
MAMBO – My Account , My Bank OnlineAustralia
MAMBO intends to support the following functions:
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24/7/365– Heavy burden on the bank’s infrastructure
Also need “parallel account structure”
Real time– Goal of 15 seconds end-to-end (customer-to-customer)– Goal redefined by removing
Payment capture and pre-processing: Seconds to hours
Beneficiary advising: Approximately 20 min.
Posting: 2 hours to next day
Tiered processing– Bulk & retail periods (00:30 – 04:00 & 04:00 – 00:30)
Payment Caps– Not currently used
Risk controls– Different limits for bulk (100K) and individual payments (10K)
Different certainty of acceptance (@ the receiving bank)
New Network Characteristic
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Low Value Interoperability Mobile/Cash management/EIPP
© Copyright 2011, Fundtech Ltd. All Rights Reserved.Source: Financial Insights
Teller
Call Center
Website
IVR
Mobile
Channels
Check•Pricing•Risk & Fraud Mgmt.•Security•Monitoring & Rptg.
Low Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
Cards• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
High Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
Payment & Treasury Systems
DDA
G/L
Reconciliation
Core
Syste
ms
Existing Architecture – The Problem
© Copyright 2011, Fundtech Ltd. All Rights Reserved.Source: Financial Insights
Teller
Call Center
Website
IVR
Mobile
Channels
Check•Pricing•Risk & Fraud Mgmt.•Security•Monitoring & Rptg.
Low Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
Cards• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
High Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
Payment & Treasury Systems
DDA
G/L
Reconciliation
Core
Syste
ms
Teller
Call Center
Website
IVR
Mobile
Check•Pricing•Risk & Fraud Mgmt.•Security•Monitoring & Rptg.
Cards• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
High Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
DDA
G/L
Reconciliation
Teller
Call Center
Website
IVR
Mobile
Check•Pricing•Risk & Fraud Mgmt.•Security•Monitoring & Rptg.
Cards• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
High Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
DDA
G/L
Reconciliation
Teller
Call Center
Website
IVR
Mobile
Check•Pricing•Risk & Fraud Mgmt.•Security•Monitoring & Rptg.
Cards• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
High Value Pymts• Pricing• Risk & Fraud Mgmt.• Security• Monitoring & Rptg.
DDA
G/L
Reconciliation
Existing Architecture MNC – The Problem X4
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The “Simple” Version of Payments Landscape In Major Markets
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Hubs - Solution In Many Other Industries
Web Marketing
Internet Hub• Free content • Community • Permission-based email• Bookmark, RSS
relationships
www.mequoda.com/glossary/h-k/internet-hub/
Airports
Hubs concentrate activity
Distributed point –to-point connectivity doesn’t scale, is difficult to manage, prone to operational failures and expensive.
Urban Developmen
t
FedEx
Hub City • Transportation• Supply • Information networks
Simplify.Reduce costs
& risks.
Guaranteed delivery to anywhere in the USA overnight
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The Payment HubCombines Interfaces and Functions
Source: Financial Insights, 2007
Teller
Call Center
Website
IVR
Mobile
Channels
Check•Unique Functions• Interface withSettlement Network
Low Value Pymts• Unique Functions• Interface with
Settlement Network
Cards• Unique Functions• Interface with
Settlement Network
High Value Pymts• Unique Functions• Interface with
Settlement Network
Payment& Treasury Systems
DDA
G/L
Reconciliation
Core
Syste
ms
CentralDatabase
PaymentServicesHub• Pricing• Risk & Fraud Mgmt.• Security
© Copyright 2011, Fundtech Ltd. All Rights Reserved.
Services Hub Can Eventually ReplaceYour Legacy Systems
Source: Financial Insights, 2007
Teller
Call Center
Website
IVR
Mobile
Channels
Check
Low Value
High Value
CardsPayment & Treasury Systems
DDA
G/L
Reconciliation
Core
Syste
ms
CentralDatabase
PaymentServices Hub
• Pricing• Risk & Fraud Mgmt.• Security• Interface with Settlement Net • Unique Functions
© Copyright 2011, Fundtech Ltd. All Rights Reserved.
Payment Services Hub
A Payment Hub Is An Intelligent And Central Engine: • Capture and mapping of payment information• Enabling workflow, business, and regulatory rules• Clearing and settlement routing optimization• Risk/liquidity mitigation procedures
It Employs Service Orchestration:• Reacting to events • Orchestrating payment services and other
banking systems
The Payment Hub Is Not: • Just a messaging component• Just a simple payment router• A discrete technology