March 1, 2011 – One of the loudest current battles among banks is the race to expand the adoption of mobile and other automated point-of-sale and real-time payments.

While the payment apps will get their share of hype, the contest will ultimately be won by the institutions that can best achieve the cross channel/cross silo processing triple crown: speed, accuracy and seamless execution.

That's creating a separate contest among providers of SaaS, SOA and other new architectures that enable payment services hubs, with firms such as Fundtech, ClearToPay, Logica, Dovetail and Misys jockeying to win business from banks that would rather worry about winning payments market share instead of losing sleep over outages, errors and latency. "Payment service hubs are an architectural vision. A bank has a platform that processes all payments, so all payments are going through one place," says Zilvinas Bareisis, a senior banking analyst at Celent. "As you add mobile and other new channels, you can easily configure the systems [through centralized management]."

Fundtech has developed a payment services hub solution called Global PAYplus, which provides SOA-based native support for payments that operate across multiple regions, channels and interfaces.

"We see this payment services hub market as not only about enabling mobile payments, but about delivering more sophisticated, timely payment services," says George Ravich, an evp at Fundtech.

The tech firm has designed a broad range of SOA standards in an attempt to align with the products and roadmaps of multiple vendors, which can speed bank deployments of new payment products. One of its client wins is Bank of America.

"We want to have consistent processing for all payments regardless of channel. Wherever the payment is initiated, this hub is a single point when it comes to the rules and the management and processing of that payment," says Milton Santiago, a portal strategy and electronic commerce executive at Bank of America, which recently launched a multi-year global payments services hub project that will leverage Fundtech's SOA.

Beyond BofA, other adopters of payment services hubs include Deutsche Bank, which has worked with Dovetail to build a hub to manage high volume payments across the U.S. and Europe, and Logica to build a hub to manage low volume payments in Europe; and JPMorgan Chase, which has built a single platform for both low and high-value payments around the world. Misys has built a hub for a South African unit of Barclays; and the wholesale unit of National Australia Bank, which has fared better recently than its retail counterpart.

Most of the deployments have been for specific types of payments or for a geographic region-full enterprise hubs are still a "vision," Bareisis says. And there are also expense-related arguments against expanding the use of payment hubs, creating a challenge for IT departments to make an argument to senior management. "The hub by itself doesn't generate revenue, and it can be a large investment," says Aaron McPherson, a practice director at IDC Financial Insights.

This story originally appeared on Bank Technology News.

 

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