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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