- November 13, 2012
- Business, Digital Payments, Global Payments Knowledge, Technology
- ACH, Banks, faster payments, mobile, payments, UK, Vocalink
Faster Payments Goes Global
Well maybe a slightly exaggerated title, but I was personally delighted and professionally intrigued to see that VOCALINK are preparing to deliver their Faster Payments technology in Singapore and are part of a consortium proposing to deliver the technology in Australia.
Personally delighted because, as a user of Banking services in the UK, Faster Payments is the one service that the Banking industry has delivered that has actually added real value to me as a punter, I only regret that the UK Banking industry had to be forced into this service by the Government sponsored Cruikshank report.
My Professional intrigue stems from knowing that the core of the technology used by Faster Payments is based on card payment software and messaging using the scalable hardware platforms and software developed over 30 years ago to provide real time card authorisations and payments. VOCALINK are using the Connex Advantage software (originally developed at A O Smith, becoming Deluxe data, eFunds and now FIS) and the HP NonStop hardware (nee Tandem) that they implement back in 1985, and are still using, to provide the UK LINK ATM transaction switching.
It is good to know that ‘Legacy system’ is not a euphemism for system that is due for retirement and that well architect technology will continue to be utilised because of its strength and robustness. It also demonstrates how the long established real-time payment world of debit card payments provides the model for the real time payment world that has become necessary as we move into a future of on-line, mobile and connected payments. I even see the UK Payments Council has cited Faster Payments to be the fundamental payment method required to support mobile payments.
Many banks and financial institutions seem to be trying to move away from these technologies and looking for more ‘commodity’ technologies systems due to what they see as the high costs of maintaining support skills for specialised software and hardware platforms. But generic solutions using ‘commodity’ hardware and software cannot offer the speed, scalability and robustness that are demanded by online real time payments. I think this is where the approach taken for Faster Payments has proved its worth. The bank, or financial institution, provides a ‘Gateway’ system to interface to the VOCALINK core switch based on a mandated specification which allows the institution to utilise its preferred technology or purchase a gateway from a number of producers, with VOCALINK focussing on delivering the high performance switching technology utilising the specialist software and hardware. The Banks have effectively ‘outsourced’ the problem and the service provider has the economies of scale to support the specialist skills and hardware systems cost effectively.
Seeing the take up of Faster and Immediate payments in other geographies would seem to confirm that payments are moving to the real time transactions basis that has support card payments for many years and leads me to speculate that may be this will become the major payment approach for banking in the future; could this be the end of the ‘payment hub’ debate with only one payment method necessary for the banking industry to support?