What according to you is the single biggest challenge
being faced by Indian banks when it comes to
payments?
I'd say it is the disparate nature of their payments
environment. Over the years, banks in India have built a legacy of
disparate payment systems which are starting to put a considerable
amount of strain on their resources. The problem is compounded
further by the newer, evolving payment systems which will soon
enter the fray. These include, the next generation of RTGS being
pushed by the Reserve Bank of India (RBI) which is based on a
different messaging format and National Payments Corporation of
India's (NPCI) India MoneyLine, the 24X7 real time remittance
system which is also being touted in some circles as a possible
replacement for NEFT. Then, there has also been a lot of talk about
merging NEFT and RTGS together which if it happens will create its
own set of complexities. Add to this, the growing number of credit
card transactions, direct debits, and ECS transactions, all of
which are being handled separately as of today.
These different types of payments require different types of
processing. For instance, there are payments which are called high
care payments which require banks to take extra care in terms of
securing them, repairing them should they be damaged in transit and
performing the due debit/credit and reflecting it accurately in the
CBS. These are typically high value transactions and banks do not
need to settle them immediately. But then there are payments like
credit card or debit card transaction which banks have to settle
immediately. Dealing with high volume transactions like these
requires a different set of processes. You have batch payments like
salary credits or dividend payouts which again require a whole
different set of processes. As a result of these differences we
see banks face a tremendous challenge in terms of managing
these different types of payment transactions.
And it is this complexity that you help banks
overcome?
Yes, our portfolio comprises of solutions which are designed to
simplify the complexities that banks tend to face when dealing with
multiple, disparate payment systems. Our latest offering Logica
Q-NG leverages our proprietary HUT model of payments which is
capable of processing tens of millions of transactions per hour.
The solution simplifies the entire payments landscape for a bank
and makes it easier for it to manage various payment types using
the most optimal routing and processing methodology. Because of its
hub based framework, one can set up a new payment type and
integrate into the system without much effort. Not only this, but
it also provides business intelligence to give a range of insights,
centralized application lifecycle and fraud management.
How has payments business been impacted by the financial
turmoil?
The payments business has remained largely unaffected by the
ongoing financial crisis. If anything, banks have realized that
overall it is a profitable business avenue and so most of them are
trying to scale up their payments business as a means of increasing
margins. Consequently, we haven't experienced any downsides as a
result of the ongoing recession.
Payments for most parts is one of those businesses which are
recession free. No matter how bleak the economy, banks will always
end up with payment processing requests.
Which is the trend likely to have the biggest impact on
payments?
I think mobility is the clear winner there. We are very excited
about mobility and the use of mobile phones in a contact-less
environments. It offers security and speed, two very important
features in the context of payments. Banks are fast realizing the
tremendous potential of the technology and leaders are already
testing the waters with pilot projects. Most mobile companies have
realized that this is the next killer app that they can build their
fortunes around. Obviously, it still requires new infrastructure to
be build and we will need terminals that can support contact-less
phones and cards, but overall we are very excited about the
contact-less payments model.
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