By Ritesh Kumar
Electronic Funds Transfer (EFT) Switch is the Heart & Soul of Payments; it is a core payment engine that the financial payments industry uses for acquiring, authenticating, routing, switching, and authorizing the financial transactions across multiple channels Like, ATM, POS, Mobile, others.
Most of the people in the payments fraternity; who knows me closely I was using one phrase at one point of time and that was “Switch on the SWITCH”, it was on the importance of having Experience/Expertise/Control/IPR/Knowledge/Domain on the core payment transaction engine i.e. “SWITCH”; it many with any of the ISO/Processor/Banks/Financial Institutions. Need for these (Experience and Expertise of the Domain) become paramount as it controls all the alternate channels of their ecosystem and in the new age banking it is most critical component.
So, either they need to have engine which is specifically being developed for Indian Subcontinent, or build battery of people who have the domain/experience to manage such mission critical application. Most of institution relies on “fly by night” or “ad-hoc” operators and that’s why there is vulnerability and systemic risk. Why institutions needs it, because the volume, interfaces or complexities are completely different from the other parts of the globe.
In the last few years India have seen phenomenal growth in the electronic and digital payments landscape and lot of players have made entry into this ecosystem like AGS, Prizm, TCPSL, C-edge, Manipal, others. Most of them have outsourced these activities to the third parties for the core engine. As this industry was growing into leaps and bounds, most of them were looking for “Jugaad” for their Go-to-Market strategies. They were relying completely on the vendors who have their product which were not thoroughly tested/tried for Indian conditions. I would like to give them benefit of doubt, because India being “cost-sensitive” they have also tried to cut corner, it may have impacted on the delivery.
We are at crossroads right now, WhatsApp moment for the banking sector with the launch of the Unified Payments Interface (UPI, Bharat Bill Payment System (BBPS) and several other innovative payments systems that are being designed and developed. In the domain of banking, payments today India is one of the most happening place in terms of innovation, technology and business. As a whole it is just a modest beginning and a real revolution is yet to happen in the form of understanding the emerging frontiers, that will have a paradigm shift in the Payments Systems. For that India needs it’s own home grown Core Payment Engine.
We are missing this one important component i.e. “SWITCH”; we were not able to do the magic, which we have done with the success of Core Banking System (CBS) like Oracle Financial Services Software (formerly i-flex Solution, Infosys – Finacle, TCS – BaNCS, Polaris – Intellect Suite – OrbiOne, BankWare; BankNow, InfrasoftTech – OMNIEnterprise, Nucleus Software – FinnOne, Mindmill Softwrae – BankMill and many more.
It’s not that India did not embarked on the journey of having Indigenous (Built for India) Switch; there were few selective and restrictive success stories, like InfrasoftTech OMNIEnterprise™ Switch, YALAMANCHILI Consultancy Services – NARADA™ Switch, ElectraCard, others.
Need for an hour is put emphasis on the “Made in India” campaign and we should have at least one homegrown core payment engine and for that “Entity” needs help/support from the financial institutions, investors, customers, regulators, government, industry players to support that entity to “Switch on the SWITCH”.
This is a personal blog. Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated.
Source : Himanshu…