Payments & Transactions

Continuing the path to real-time payments innovation

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Since the 1960’s, IBM has worked with banks to help simplify their payment operations by upgrading payment processes, integrating existing silos and renovating legacy systems. In today’s drastically changing payment landscape, banks now wrestle with implementing new real-time payment schemes while satisfying new regulatory mandates and the demands of industry bodies, customer and merchants. These new real-time payments are creating the most disruptive change in payment habits in generations.

Some early adopter geographies are even doing away with cash as a payment option. Just recently, debit cards overtook cash payments in the UK for the first time. Last month, Faster Payments processed 163.3 million payments, which is a 20 percent increase on the amount processed in June 2017. And 2017 saw Faster Payments break the record for the highest amount of payments processed in a single year.  Sweden is another example of a geography moving away from cash and promoting mobile payments.

This next generation of financial innovation may need to be created through the cooperation between both FinTechs and banks. The old model of financial institutions and central banks coming together to develop innovative payment solutions may not be competitive with the innovation that is being driven by nimble FinTechs who are not bogged down with legacy structures and processes. It is the FinTechs—seeing and capitalizing on service opportunities that have gone unnoticed—that will spur the next wave of financial innovations. However, on the flip side, the FinTechs usually don’t have banking licenses and need access to accounts at the banks to satisfy their customers needs.

For those banks looking to partner with FinTech’s, the need for API’s comes to the forefront.  The API’s provide the key links between the bank and the FinTechs, as well as potentially other third parties.  As Banks respond by innovating/modernizing their payment operations they will need to address the new regulatory challenges created by the inclusion of FinTechs within the banks processes. Beyond just providing API’s the banks will need to also optimize and simplify their payment operations.

Financial institutions best positioned to capitalize on this next generation of innovation are ones that implement a unique combination of hardware and software which is both flexible, to handle the increased volume, speed and volatility of these new real-time payment transactions, and agile to handle the variance as to who or what is initiating the transaction.  Pairing IBM LinuxONE and IBM Financial Transaction Manager software is a logical choice.

IBM LinuxONE servers are the foundation for trusted digital experiences. Pervasive encryption and the ability to offer lower cost transaction-based pricing are two of the key attributes that the IBM LinuxONE servers offer. The demanding payment schemes, i.e. “non-functional” requirements, are higher than ever. The value of using IBM LinuxONE is sweeping and includes response time measured in milliseconds; required to scale at short or no notice; unpredictable peaks…particularly real-time payments, continuous availability (24x7x365), and highest security around highly sensitive data.

As for software, IBM Financial Transaction Manager family of offerings integrates, orchestrates and monitors financial transactions with an open, modular architecture that allows for modernization that maps to the business needs. It delivers consistent processing across multiple payment types, enabling institutions to converge their payment operations on to a single, unified payment hub which then lowers operational risk and costs.  IBM Financial Transaction Manager can accelerate the delivery of improved payment processing and services to customers.

One company looking to evolve their payment services with new hardware and software was transaction management service provider European Business Process Institute (EBPI). EBPI launched a new SWIFT Payment Bureau service. With existing systems struggling to cope, EBPI selected IBM Financial Transaction Manager on an IBM LinuxONE™ Rockhopper server to help expand payment processing to eight million transactions per month. Read more about EBPI’s journey to achieving business growth by delivering improved services by partnering with IBM.

If you are attending Sibos 2018, let’s connect to discuss how we can help you redefine how money moves within your institution. Sibos is the world’s premier financial services event organized by SWIFT for the financial industry. IBM will be hosting multiple sessions October 22-25 in Sydney, Australia. IBM looks forward to working with your financial institution to address your payment processing challenges through use of our new technologies and deep industry expertise.

Learn more about the path to real-time payments innovation by visiting


Director, WW Payments Solutions

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