Andrej Eichler, Head of Financial Industry Services, Six Payment Services
Many processing platforms being used today are up to 20 years old and were not designed with new payment methods, such as e and m commerce or contactless and wearables, in mind. Nor were they expected to cope with the massively increased number of transactions that we have seen in recent years.
The result is that many platforms are now a patchwork of legacy IT infrastructure and add-ons meaning that systems are less efficient with limited transparency and workability. The solution is to migrate payment portfolios to a modern and flexible platform that simplifies business processes and transactions, offers greater flexibility and, most importantly, provides a competitive edge.
Whilst the decision to migrate should be approached with reasonable caution due to the risk, cost and time involved, the benefits of switching to a provider that offers a modern solution more suited to contemporary requirements far outweigh the drawbacks of staying with an increasingly redundant system. The key is managing the transition well.
Issuers and acquirers tend to be more amenable to opening conversations with providers when contracts are up for renewal, particularly where a monopoly has previously existed and perceptions of service are poor. However even when the time of renewal comes around, doubts about migration are likely to remain. For providers, the objective is about making both the platform and offering stand out and working in collaboration with customers to ensure the migration process is as seamless as possible.
Customers need to be aware of what is involved when it comes to migration. Acquirers’ customers, the merchants, have thousands of terminals plus a range of customised solutions. On both sides, it is a question of being able to adapt to new processes. This requires both time and money, all the while ensuring business continuity.
The migration process will touch a number of parts of the business – customer care, call centres, bank branches, security and fraud centres as well as marketing. All these areas will need to adapt the way they work and put plans in place to cope with the upcoming changes. The migration will also have to factor into decision-making for some time.
For the various teams, the migration will require additional resources. The existing teams need to maintain their usual operations, including enhancements. But additional capacity i.e. increased headcount will also be necessary to implement the new platform.
It is not unusual to run old and new platforms in parallel during a transition period. This involves so called ‘bridge programmes’ between old and new. It’s important that these are stable and highly functional as they will be bearing the entire load of the ongoing business until the next phase. Fall back scenarios are also a must have requisite.
Successful migration also needs the co-operation of the incumbent supplier as without this, it is more or less impossible to ensure the migration as the new platform would be working blind.
Arguably the most difficult area of the migration is the data. Where dynamic data is concerned, changes may be made right up to the point at which the data is migrated and the checks and balances that need to be in place to make sure nothing has been missed must be robust, secure and reliable to provide the required level of comfort.
Customers like the reassurance of working with someone who has previous experience of implementing a migration. Whilst each migration is unique, the experience of doing it before can be applied to the current situation.
The platform needs to have an economy of scale, both for the actual mechanics and price. But the ability and willingness to adapt a platform to individual customer’s needs is also important.
The whole process is likely to encounter bumps in the road that may result in some delay. It is easy to embark on the process of implementing a new platform and set targets for the timeline. But the challenge is to design the migration path from the old platform to the new one. The whole process will be made smoother by making sure all the different stakeholders are working in sync to a proper, agreed timetable with a shared goal. More often than not it is the less tangible aspects such as communication, proactivity and realistic expectations where problems arise rather than the technical aspects.
It’s a case of ‘no pain, no gain’. Whilst the migration process itself will be hard work, the benefits once it has been completed are considerable.