An open future for digital banking in Pakistan

1LINK enables fast, affordable integration with API platform
by Kristin Johnson
6-minute read
Man inserting debit card into an ATM machine

You might say that 1LINK (Pvt.) Limited is the digital glue that connects all of the banks in Pakistan. From ATM withdrawals to online utility bill payments to electronic funds transfers between one bank and another — 1LINK is behind the scenes, making those transactions happen.

The company also acts as the focal point for linking its member banks to Visa, MasterCard, JCB and UnionPay global payment networks, as well as to PayPak, Pakistan’s domestic payment scheme, owned and managed by 1LINK.

Incorporated in 2004, 1LINK is considered to be the de facto switch and payment system of Pakistan: it is the sole entity integrating banks throughout the country. The company is owned by a consortium of 11 large banks and has 37 member banks, 700-plus billers and 20-plus non-banking entities that use its payment networks, or “rails.”

1LINK has thrived over the years — partly because it always has an eye toward the future. In developing its strategic vision in 2016, the company set its sights on opening its services to a larger target market. “There were many third parties that wanted to do transactions using the 1LINK rails,” says Azimullah Khan, Chief Information Officer at 1LINK. “We wanted to enable those banks, fintechs, independent service organizations, and bill aggregators and initiators to use our services.”

However, considering the significant cost and time that was required to connect with 1LINK’s system, several potential players faced challenges. At the time, setup and testing of the company’s core electronic funds transfer (EFT) switch technology was complex and the software to run it was in short supply in Pakistan.

Woman with hijab using an ATM machine

Reduced time to onboard new members from 2 – 3 months to

2 – 3

weeks

Grew transaction volume from 590 million in 2019 to

1.4

billion in 2020

We wanted to maintain the same high level of security on our API platform as in our legacy format. The DataPower model provides an environment where transactions and access to APIs are extremely secure.
Syed Suleman Hasan
Chief Risk Officer, 1LINK (Pvt.) Limited

As part of a five-year strategy developed with the help of an international firm, 1LINK planned to come up with an open API platform. By eliminating the need for expensive middleware or an EFT switch, an open API portal would make it much faster and simpler for various entities — freelance developers, startups, fintechs, banks, financial institutions, non-bank financial institutions, electronic money institutions, payment system operators (PSOs), payment service providers (PSPs), billers and government institutions — to connect to 1LINK’s testing environment and ultimately transition onto 1LINK’s rails.

There were, however, a few important asks. The solution had to be housed on premises, in compliance with State Bank of Pakistan security regulations, and scalable so it could handle large, rapid influxes of transactions.

Man typing at a workstation with dual computer monitors
Technician working in server room
There is a constant push towards digitization now — especially this year, because of COVID. The good news is that we are prepared.
Syed Ahsan Aslam
Chief Disruption Officer, 1LINK (Pvt.) Limited
Self-serve testing, fast onboarding
There is a constant push towards digitization now — especially this year, because of COVID. The good news is that we are prepared.
Syed Ahsan Aslam
Chief Disruption Officer, 1LINK (Pvt.) Limited

After evaluating several API management platforms, 1LINK chose the IBM API Connect® solution built on IBM® DataPower® Gateway hardware. Together, they provide a centralized platform for secure access to the company’s APIs for testing and integration. Developers can log in to the platform over a self-serve portal to test with 1LINK’s APIs. The platform also offers API performance and monitoring capabilities.

The company engaged IBM Business Partner Systems Limited to manage the project in late 2018. According to Khan: “Systems Limited was involved from day one in overseeing the entire design and implementation. IBM also worked closely with us to document the overall scope of the project and to consult with us on software and security issues.”

1LINK was particularly impressed by the solution’s security features. “We wanted to maintain the same high level of security on our API platform as in our legacy format, keeping in view 1LINK’s security standards and PCI DSS compliance guidelines,” says Syed Suleman Hasan, Chief Risk Officer at 1LINK. “The DataPower model provides an environment where transactions and access to APIs are extremely secure. And since it’s not a purely open-source platform, we anticipate being able to upgrade or patch the system without issues.”

1LINK Developer portal is a free-of-cost solution offering a catalog of publicly available APIs for interested players to incorporate 1LINK functionality into their use cases. Syed Ahsan Aslam, Chief Disruption Officer at 1LINK, explains: “Over the last two years, the digital payments space in Pakistan has witnessed phenomenal growth, especially the fintech space. Every day, new entrants want to try new things while existing players, such as banks and billers, are exploring ways to cut down overheads and introduce efficiencies. Now, they can test and experiment at their own pace, and when they are ready, they can contact us to transition into our production environment. It’s a win-win situation.”

Woman making contactless payment at a restaurant
A vision realized

Today, 1LINK has put its original vision into action — and that vision continues to evolve. “There is a constant push towards digitization now,” says Aslam, “especially this year, because of COVID. The good news is that we are prepared. That’s why we started in 2018 — so that by the time we began to see the upside in transaction growth, we would be technologically ready.”

The time and cost savings for 1LINK customers driven through this solution is also a win. Khan estimates testing and onboarding on the API Connect platform takes two-to-three weeks, compared to two-to-three months with the legacy system.

As transactions that pass through the API management platform begin to ramp up, the overall outlook for the company is bright. In fact, the total transaction volume for the company more than doubled between 2019 and 2020 — from 590 million to 1.4 billion — and the value of those transactions grew by 64% during that same period — from PKR 4.7 trillion to PKR 8.3 trillion.

Recently, 1LINK has been doing Open API road shows and is getting a lot of interest from the fintech community. “We have a very healthy pipeline in terms of new entities trying to connect to 1LINK,” says Aslam, “and we anticipate that more volume will come through the Open API platform when these entities actually go to market and launch their use cases.”

Going forward, the company plans to use the IBM API Connect solution to enable new integrations with additional industries and areas of government. It also is investigating ways to modernize its infrastructure — a transition that IBM API Connect is preconfigured to accommodate — as well as the possibility of incorporating artificial intelligence into its marketing systems.

“We are looking for a long-term relationship with IBM. The idea is to have secure, reliable systems and to be able to scale up to handle a large level of transactions — not just from ATMs, but from mobile apps, internet banking portals and e-commerce apps. We are looking at API Connect to help us do that,” says Khan. “We started off with 12 APIs. Today we have already crossed 30 APIs and expect possibly to have another 100 over the next two years.”

1LINK logo
About 1LINK (Pvt.) Limited

1LINKExternal Link, owned by a consortium of 11 banks, is Pakistan’s first payment service operator (PSO) and payment service provider (PSP) and the largest switch and payment system, providing a host of valuable online banking services such as ATM switching, bill payment, inter-bank funds transfer, fraud risk management, switch dispute resolution, global payment schemes and domestic payment schemes. 1LINK is continuously evolving and adding new products and services to benefit the financial industry.

About Systems Limited

IBM Business Partner Systems Limited is a leading global provider of IT, business process outsourcing (BPO) and contact center services. Founded in 1977, the company is headquartered in Lahore Cantt, Punjab, Pakistan, and provides computing strategies and solutions to both corporate and public sector organizations. It has overseen projects in the US, Pakistan, the Middle East and Africa and employs over 5,000 people globally.

Solution components
1LINK logo
About 1LINK (Pvt.) Limited

1LINKExternal Link, owned by a consortium of 11 banks, is Pakistan’s first payment service operator (PSO) and payment service provider (PSP) and the largest switch and payment system, providing a host of valuable online banking services such as ATM switching, bill payment, inter-bank funds transfer, fraud risk management, switch dispute resolution, global payment schemes and domestic payment schemes. 1LINK is continuously evolving and adding new products and services to benefit the financial industry.

About Systems Limited

IBM Business Partner Systems Limited is a leading global provider of IT, business process outsourcing (BPO) and contact center services. Founded in 1977, the company is headquartered in Lahore Cantt, Punjab, Pakistan, and provides computing strategies and solutions to both corporate and public sector organizations. It has overseen projects in the US, Pakistan, the Middle East and Africa and employs over 5,000 people globally.

Solution components