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How financial institutions can choose the right vendor in a highly competitive payment market

How financial institutions can choose the right vendor in a highly competitive payment market

Paul Jennekens

Manager Marketing

27 August 2019

How financial institutions can choose the right vendor in a highly competitive payment market

Guestblog by Martin Golding, Global Vice President Licensing Worldline

Selecting the right vendor for a long-term engagement can be a difficult choice for financial institutions searching for payment solutions. Often these financial institutions have focused primarily on product differentiation and functionalities. This has become increasingly complicated now that the payment market is highly competitive and standardized, third-party vendors offer similar payment services solutions. This drives the financial world to look beyond the product features and functionalities towards the underlying service relationship. But what exactly does a good service relationship mean?

In a great relationship, a vendor delivers more than just the basic requirement that is a complete suite of solutions. It is true that they need to possess knowledge and expertise in all aspects of the deployment process. However, this is just the beginning of a successful partnership, as the vendor must frequently fulfil the role of a source of consultancy and resourcing. This role includes the ability to complement the skills and capabilities of the financial institution with relevant knowledge, processes and services. Basically, vendors need to serve as an extension to the clients existing capabilities.

A proven history

A question every financial institution needs to ask a potential vendor, to find out whether this is a credible payment partner, is: does the vendor have a proven history of using its own products to drive internal business processes? This question is crucial. Why? Because this ultimately results in a greater emphasis on capacity, roadmap and product lifecycle.

If a potential partner uses its own software, it delivers big advantages for a financial institution in terms of remaining relevant and competitive in the future. After all, this is an additional guarantee for proactive, continuous investment in product development. Such a partner is also highly motivated to optimize the total Total Cost of Ownership (TCO) and reduce operational risks. This can be done via efficient use of hardware and carefully selecting third-party software.

All-in-one solution

A good vendor should also be open to the request of financial institutions for all-in-one solutions that include hardware and also software from a different party where necessary. The advantage of an all-in-one-solutions is that it streamlines the purchasing process in the short term and potential reduces cost. Besides that, the responsibilities for the entire software and hardware platform can be assigned to a single vendor. This way, there can be a single point of contact responsible for the entire infrastructure, which is a proven tested combination of hardware and software products.

Worldline has recently proven just such a combination, by benchmarking our WL Pay Front-Office payment transaction switch on the Atos BullSequana S enterprise server platform earlier this year. As a result, we know that we can scale WL Pay Front-Office performance to just over 4000 transactions per second (TPS) with efficient use of the BullSequana S servers which makes this all-in-one solution is future-proof. Not only can we achieve this extreme level of performance, but we can also accurately size and scale all in one solution to support from entry-level requirements upwards as required by our customers.

The right vendor that meets these above-mentioned characteristics and qualities can ensure flexibility, not only at the implementation of new services and during the duration of the contract, but afterwards as well. After all, there might be a chance that current and future needs shift as a result of changing customer behavior or new technological developments. Flexibility means that a good vendor gives financial institutions the possibility to either run parts of the service in-house on a licensing basis, opt for an IT hosting or application management model, move towards a SaaS model, or outsource the processing service entirely.

Avoiding unpleasant surprises

In a nutshell; when choosing the right vendor, consider not only the short term and product-focused view, but also the long-term holistic picture. Only then will you, as a financial institution, avoid unpleasant surprises in the near or far future.