This post by Jamie Pearson - Product Manager for Payments at IR, first appeared on ACIexpert view.
Payments systems have become highly complex. Why? Because of explosive growth and many years' worth of customized capabilities and combinations, and mergers and acquisitions. In many cases, this (complexity) has resulted in dozens of different payments engines, with point-to-point integration requirements.
While there are moves taking place to consolidate and simplify systems, and connect and integrate multiple payment service providers and third party gateways, this architectural migration introduces more short-term risk.
Payment hubs provide the solution by offering the global visibility and standardized controls crucial to ensuring consistent handling of payments, regardless of geography, payment type, or who requested it. Payment hubs also ensure that payment workflows are compliant with the payment policy of any business.
The importance of the payments hub is the focus of the second video in our series featuring Darc Rasmussen, IR CEO and MD, and Craig Saks, ACI EVP and Chief Product Officer.
Let's look at some of the key benefits of a payment hub.
Consistency is key. A successful payment hub strengthens internal controls and processes within a business, including a flexible approval workflow, and greater visibility. A standardized set of controls is vital to eradicating unauthorized payments - including payment approval scenarios, two-factor authentication, specific procedures for remote or unavailable approvers, and actions to put in place if payment modifications are required.
Many payments teams struggle with achieving complete transparency into all outgoing payments before they happen. Transaction delays and poor customer experiences through shifting expectations, as well as evolving regulations within the banking industry means that the need for real time visibility is crucial. Payment hubs, through consolidation of all payment activity, can provide that visibility and certainty as to what payments need to be authorized.
A payment hub can reduce the cost of managing payments. IT no longer needs to manage bank connectivity, with potentially huge savings for a business. Multiple systems can be consolidated into one and banking services can be optimized, eliminating duplication caused by the use of multiple systems.
A pay hub enables delivery of services and capabilities across retail and wholesale environments in a consistent, scalable way—across payment types, channels, networks and currencies. This hub enables financial institutions to move away from payments silos to centralized infrastructure with the flexibility to manage transactions from any source to any destination.
While consumers are happily spending money via electronic avenues, banks have to rapidly assimilate, manage and monitor an increasing array of payments methods or risk losing business.
As banks introduce the latest payments technologies, and adopt and manage new services, they must also ensure current technology and customers are not affected. This is why real-time performance monitoring is so important.
Being able to drill deep within the infrastructure to get extensive diagnostics on current, historical and predicted capacities allows operations staff to quickly identify and resolve problems before they affect consumers, brand and reputation.
Visibility into transactions as they occur, along with the ability to understand how transactions are processed through the value chain, not to mention insight to the various payment channels, is vital. If payment systems or the payments hub itself become overloaded, degraded or fails, IT staff will know beforehand, rather than afterwards. And can take rapid action.
This is particularly important as it relates to insight into fraudulent activity. With visibility to both inbound and outbound payments, the hub is a potential point of control for a number of regulatory and compliance services.
By optimizing a payments hub's performance and increasing operational efficiency, banks can ensure their fraud management systems are able to provide comprehensive fraud, anti-money laundering and sanctions detection across all processing steps and payment types. In this way, financial institutions can manage increasingly sophisticated fraud attacks, evolving regulations and legislation, and speed the release of new and innovative products, all while enhancing their customers' experiences.
Fraud prevention is usually the driver for a business to adopt the use of a payment hub. However, any business will see and benefit from the other benefits including visibility, standardization, time to marker and cost reduction. IR's payments solutions allows organizations to improve performance, productivity and reliability, which will all maximize ROI.