FEATURE
Switch in the cloud
NanoSwitch from OMA Emirates
Keeping in mind the planned roll out into multiple African countries, and the need for more than one switch in large African countries, OMA Emirates has hosted its switch middleware platform in the cloud. A typical onsite switch implementation including interconnectivity with the national bank and national switch and scheme certification can take as long as 12 months to 18 months. By moving the switch to the cloud,
When a transaction using an issuing bank’ s virtual card in a mobile phone is requested for at a retail merchant’ s POS terminal, the request is first routed through the acquiring bank’ s network to the acquiring bank. From here it is routed through the national switch to the issuing bank’ s network and then further to the issuing bank. After the approval is generated from the issuing bank, it follows the reverse path to the retail merchant’ s POS terminal.
After settlement, the final transaction value is forwarded to the retail merchant from the consumer’ s account at the issuing bank. This will include a deduction for network access and the acquiring bank’ s fee in the settlement. Both the issuing bank and the acquiring bank may also make direct deductions into the consumers account based on where the retail transaction is done from. This
OMA Emirates intends to reduce the lead time with the same certification requirements to within 6 months. A second switch in the same country would take less time, at four months. While OMA Emirates would use local datacentres incountry as well, Sangal is prepared to invest in their own datacentre within the same country or in a suitable adjacent country, to meet any local availability and reliability requirements.
transaction path may be much simpler than described above, if the issuing and acquiring banks are one and the same, in other words they share the same network and processing steps as well, usually referred to as On-us.
Global payment schemes such as Visa and MasterCard do not recognise telecommunication service providers as being eligible for either an issuance or acquiring bank’ s license.“ Somebody has to issue a card and then somebody has to accept a card. Both issuance and acquiring as a license is only given to financial institution which are categorised. It is only banking institutions who get this license from the scheme. Schemes like MasterCard and Visa do not give it to a telecommunication service providers, the reason being they are just a carrier,” points out Sangal.
Sangal believes that consumer facing eco systems have already been put into place across the African continent. There are a large number of small ecosystem that are already operational but are not able to scale because of the fragmented nature of the payment acquiring process. By working closely with issuing banks and telecommunication service providers in its African role as a payment services provider, OMA Emirates hopes to bridge the gap between the retail merchant, issuing banks, acquiring banks, and the telecommunication service providers. The role of payment service providers is to invest in the local ecosystem and connect everybody on the same network.
“ There is no single perfect player that does everything, and we felt this is going to change in Africa. So, we become a kind of a mediator for both parties to actually complete an ecosystem. We decided this year what we are going to do is, we are going to take every bit of the ecosystem and connect it on a platform. Whether bank A has a product and vendor B has a product, we will be able to merge them on a single platform. So, when I say that, I am not creating an ecosystem there. There are preset ecosystems that allow acceptance on the devices. The solution front is already certified and you can complete your transaction on it. It is cashless and the best part is, it is safe and secure. It will be covering everything. We are only looking at banks and telecommunication service providers at this point,” Sangal elaborates at length.
With OMA Emirates investing into building such multi-bank network platforms with its own resources, and charging banks on a service fee basis to ride its network, Sangal believes the barriers to integration would be significantly lowered. He points out, the major hurdle is the capital injection which most banks are reluctant to do at present, especially in times like this where survival has become a challenge, and keeping a customer has become even more challenging. By adding on additional payment channels to the same retail merchant terminal as well as offering the network option jointly to multiple banks, to opt-in on a service fee basis rather than
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