FIS PAYMENTS AS A SERVICE

A FASTER START TO SEPA INSTANT PAYMENTS

BANKING AND PAYMENTS

FIS Payments as a Service 1

Transforming the payments landscape

Payments have never been so exciting. There is a wave of regulatory-driven change, a host of new entrants and ever more innovative services and applications being developed.

Real-time payments are rolling out in Europe with the arrival of SEPA Instant Credit Transfer (SCT Inst) and there are many new schemes around the world, including in the US and Australia. Add to this PSD2 and Open Banking and the regulatory revolution will transform the payments landscape.

Consumer expectations are ever-increasing, driven often from experiences outside of financial services. Digital delivery is not optional as 64 percent of customer interactions now take place through digital channels. Offering ‘next day only’ payments will not be a viable option for much longer.

Getting ready for Open and Instant

Payments in Europe

With the arrival of SCT Inst, many European institutions are looking at what they need to do to move to real-time. The European Central Bank (ECB) has championed the development of a pan-European real-time payment scheme – a prerequisite for a modern financial system.

Payment InstitutionLegacy systems insulated from real-time payment processing

SCT InstClearing and

settlement mechanisms

The SCT Inst payment scheme as defined by the European Payments Council (EPC) is scheduled to come into effect across 34 SEPA countries in late 2017. Under SCT Inst, immediate payments can be made 24/7 with funds delivered to the creditor’s account within a few seconds, up to an initial limit of EUR 15,000 per transaction. Immediacy is not the only goal – a successful payments scheme must also adapt to the context, adding value and boosting innovation.

PSD2 increases the role of third parties in the payments value chain and the payment provider must allow regulated third parties access to payment initiation and account information. Many payments providers are considering how to manage these relationships and whether to go beyond compliance to enhance competitiveness.

As a result of all these changes, new business models are emerging with potential for new future revenue streams. However, keeping up with regulatory requirements is costly for payment providers and the benefits are not always immediate. Many institutions are now evaluating their delivery options and looking for alternatives that will deliver faster services and drive greater efficiency, while keeping pace with the whirlwind of change.

Get a faster start to instant payments with PaaS

PaaSFully managed SCT

ready service

FIS Payments as a Service 2

Scheme Connectivity

Client Systems Connectivity via API

Additional Services Operational Support

UK BACS, CHAPS, FPS

Queries

Open API/PSD2-ready solutions

AML Screening

Reconciliation

Settlement

FIS Monitoring

Client Dashboard

Client UIs

EURO SCT Inst

Payment submission interactive or batch

Payment HubPayment Processing

WarehouseException handling

INTERNATIONAL SWIFT

Accounting

With so much change, and so much potential, payment providers are typically looking to rent solutions in the cloud rather than buy software and run it in-house. This has many benefits, particularly when a new payment scheme such as SCT Inst is introduced. Services such as PaaS enable payment providers to work with the new real-time capability without making huge investments at a time when volumes are low. With PaaS, financial institutions do not have to bear high upfront Capex costs in the early days of SCT Inst.

One of the major challenges for institutions that are new to real-time is that back-end legacy systems are not built to function in that way. To address this, there are two potential approaches. First, legacy systems can be updated to operate on a real-time basis from day one, which is no small task. Or second, you can insulate legacy systems with PaaS, and take time to modernise your infrastructure. It is no surprise that many payment providers prefer the second ‘evolutionary’ option.

Indeed, for many institutions, real-time represents a strategic capability, rather than offering immediate return. To unlock its true potential in the future, it must therefore be delivered in a flexible way so that new overlay services can be easily supported, building value around the core transaction. Equally key is keeping costs predictable and under control.

For tier one financial institutions that may otherwise look at an ‘on-premise’ solution, PaaS can offer a stronger case for investment in the short term, with less risk. It can also significantly reduce the time to market and get instant SEPA payments to your customers faster. When volumes have increased, payment providers will be in a better position to determine the right choice for their business, either expanding their real-time payments on PaaS or moving to an in-house solution.

For mid-sized and smaller institutions, PaaS can provide an efficient, affordable way to keep pace with market standards and compete with the incumbents.

That is why FIS has developed PaaS – a hosted payments service that can be accessed through a single API which fulfils all the SCT Inst payment processing requirements. Add to this Open API, reconciliation, settlement and AML screening options and you have a full end-to-end service available to meet the requirements of your business today and in the unpredictable future.

FIS Payments as a Service

A fully managed SCT Inst-ready service with Open API, reconciliation, settlement, and AML options

FIS Payments as a Service 3

PaaS Key Features

• Proven Software Your service will be running on market-leading, proven software – owned, managed and developed by FIS. The payments hub, gateway, switch and reconciliation software are used by tier one banks around the world and are therefore capable of handling significant volumes. Innovative Open API management software is also an option to support PSD2 compliance. As such, you can rest assured that the service will continue with high availability through unpredictable peaks and troughs, and will meet demanding real-time SLAs.

• Bank-grade Security PaaS is hosted in the FIS hybrid cloud, giving you the flexibility and efficiencies of a cloud service combined with FIS’ private standards and processes.

• Fully Compliant with Scheme, CSM and Regulatory Requirements PaaS will ensure that you remain fully compliant with all scheme, Clearing and Settlement Mechanism (CSM) and regulatory requirements.

• Service Excellence Established 24x7 support model. FIS has a well-known record of providing hosted services (e.g., Swift service bureau, reconciliation, card processing).

• API-enabled and PSD2-ready Instant payments and Open APIs go hand in hand. PaaS comes with predefined REST APIs for easy channel integration for payment initiation. In addition, integration with internal applications is achieved via exposed APIs. This minimises the effort required by you to add new schemes or functionality as it is developed. For banks that are also looking for a PSD2 ready solution, PaaS can offer optional Open API solutions to ensure that you can provide third parties with access to account information and payment initiation. Further to this, you can go beyond the legislation and offer fine-grained controls to your customers and a richer set of APIs to third parties. Moreover, your institution can become a Third-party Provider in its own right, enabling your customers to initiate payments from multiple payment providers.

• ISO20022 at the Core ISO20022 is the foundation of the SEPA standards and the recognised standard for payments internationally. PaaS, and the FIS Payments hub on which it is based, has ISO20022 in its DNA. This means that as greater international interoperability develops, or more overlay services are added, the changes required will be minimal.

• Clear Commercial Terms and Low Capex With PaaS, you just rent what you need now with the flexibility to add new functions and schemes as your business evolves. There are low upfront costs, and the predictable Opex service costs minimise the Capex demands on your business.

Why partner with FIS for SEPA Instant

Payments?

You can have confidence in the experience, financial strength and stability of FIS to ensure that you have a payments service you can rely on. We are a Fortune 500 business focused on delivering payments and banking technology to over 20,000 clients in more than 130 countries around the world. In fact, we currently process 27 billion transactions for 750 million end customers globally.

Payments and banking technology are our business and we will always be sensitive to the complexities and dependencies of your wider eco-system.

We use our practical experience to develop forward-looking solutions. In the demanding real-time payments world, we have delivered projects to support Faster Payments in the UK, NPP in Australia, The Clearing House in the US and FAST in Singapore. In fact, FIS solutions are at the core of the SEPA payment processing market, with major banks and ACHs using our robust and flexible payment hub.

While we are a global business, we have a strong European presence. We engage with clients through our user groups to ensure that our services are continually evolving to meet your needs. We actively participate in European industry groups so that we can contribute our know-how and get your customers new solutions faster.

Interested in hearing more?

The team at FIS would be delighted to discuss with you how we can help your payments business.

Please contact:

Telephone: +44.(0).1923.471.850

or email us at: getinfo@fisglobal.com

lorraine.brady@fisglobal.com

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About FISFIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Florida, FIS employs more than 53,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.