In this Fintalk podcast, Transact Payments, W2 Global Data and Global Processing Services (GPS) discuss the challenges of launching a prepaid e-money programme. Listen to the podcast or read the full transcript below.
Hello and welcome to this Fintalk podcast. Today we’ll be discussing the challenges of launching a prepaid program from an issuer, processor and KYC perspective. Joining me – Michael McCaw, editor of bobsguide and Payment Eye – is Kriya Patel, managing director, Transact Payments Limited, Neil Harris, chief commercial officer, Global Processing Services (GPS), and Gary Pine, chief product officer, W2 Global Data. Thank you all for joining me.
Firstly, Kriya, perhaps you could explain the relationship between the three organisations.
Kriya: Thanks Mike. The sector that we operate in – and especially as it pertains to prepaid cards – it’s really instrumental that you have the right partner chain to deliver the appropriate solution for the market. So today two of our key strategic partners are W2 from a KYC customer verification, AML control point of view and making sure risk management on the compliance side is maintained, and we’ve been working with GPS for a very long time. There’s such a good synergy between the companies in our approach to how we onboard clients, how we manage clients after they’ve gone live, and how we support them thereafter. It’s almost seamless in how we operate between the three companies. Our partnership is really about controlling the compliance and risk management with W2, and making sure we’ve got the best of breed in terms of the technology aspect that underpin effectively what we’re providing by way of regulatory sponsorship and license sponsorship for the servicing of programme managers and fintechs and regulated companies in the market today who are looking for a sponsor partnership to take their product forward.
And how do you ensure system implementation is maintained to a high standard?
Kriya: The critical aspect is – and I’m a great believer in this – one company can’t do all of the key components in delivering a programme successfully in one. I think you can be experts in certain areas, and so finding the right partners to deliver that is instrumental. When it comes to the technical aspect what we really like and what our partners have also echoed is working with partners who provide flexible APIs, are able to help the education piece from a technology point of view help clients understand how to integrate the various systems – whether that’s the W2 system and how it interfaces with onboarding through the GPS platform how that then ends up with the backend reporting to ourselves to make sure the reconciliation, transaction monitoring and compliance checks are undertaken in a smooth and efficient way is really instrumental. Where the technology piece and the value from the technology piece comes into play, I think it’s the fact that there’s companies like ourselves – the three of us are willing to sit down and say ‘look let’s not second guess what the client wants, let’s prepare to be whiteboarding solutions that fit the client’s needs best’. That’s the big differentiator, but if I’m honest Neil and Gary have been more instrumental on the technology side. Our job is to make sure we get those business needs clearly articulated so when we hand it over to these guys they really know what’s required from a delivery point of view.
Neil, what type of regulatory issues do you need to bear in mind?
Neil: Obviously regulation is a big topic and a constantly moving feast. When you wind it back it comes back to three key things. Why does regulation exist? It’s to drive competition and to ensure we’ve got a world class, secure platform and solution to the marketplace – be that for business clients or consumers. And finally to make things simple, to make it accessible, and to harmonise across the board, because obviously within Europe we’re fairly blessed. It’s still complicated, but we’re fairly blessed with a more harmonised region than others such as Asia Pac, or Africa, or Latin America regions.
From a compliance perspective, it’s super complex. Schemes such as MasterCard and Visa can overlay their interpretations of the regulations, and effectively enhance the regulations to be at the forefront – and in front of the bad guys, effectively. So it’s all for good reason but what it means is that actually, by trying to make things simple it actually is incredibly complex from a backend perspective. We’re doing an awful lot of stuff on the back end that people just don’t even imagine, don’t even dream of. And that’s what our job is all about. As a collective – as Kriya said – with our business and our ecosystem at least as partners this is about making things that are massively complex, super simple. Believe it or not running a financial institution is not easy. What our job is to do, is to make it as simple and as slick as possible.
And from a functionality perspective, why work with TPL?
Neil: There’s three key aspects – one of which Kriya has already mentioned – which is the expertise of the team. From an issuer perspective TPL are one of our strategic partners, we’ve done many, many, projects so it’s not just about expertise it’s not just about the cookie cut solution: we know, and we can pre-empt what they need – and they know what we need. It’s that kind of repeatability, the fact that we’ve done it many times before, and what that ultimately translates to is speed to market so any organisation that partners with TPL and GPS combined with our other partners in the ecosystems such as W2 the speed to market is the real key aspect that they derive. The educational aspect is a big part of our process – taking people along on our journey so they can fulfil their journey.
Gary, from a KYC perspective working in more than one jurisdiction has got to have complications, where are these most prominent and how do you get around them?
Gary: Working with TPL, working with GPS – they bring a hell of a lot of experience to the market, and as much as it would be easy for a new provider or a new platform operator to come into the market and say ‘we’re just going to adhere to the very minimum compliance standards’, but working with these guys – let alone setting off on the right stall to say ‘look you need these things in place from a very basic point of view’, working with these guys let’s us step on and look at the workflow flexibility that we offer, the capabilities that they have for point in time screening, point in time onboarding checks, the point in time screening capabilities from an AML perspective allows us to bring a customer on and keep them close, keep them engaged. But also as Neil said, it’s about simplicity. The simplicity of the arrangement that we have through a single API to get the customer on, and as we move across jurisdictions there may be an operation, or there may be an opportunity in – say Italy, not withstanding the fact the Italian database, the Italian registry information is slightly different than the German, so every country has it’s own data challenges so once again we aggregate all that up to one single API then offer it back to TPL and GPS – a very simple and streamlined set of services.
I was talking to an operator recently who said that as much as our regulation and compliance was a certain way on day one they were keen to come back and say ‘look we need to rethink this, because we’ve done everything we said we should but now we’ve got a fraud problem. We’re allowing too many people through the books we now need to rework our onboarding process’. So we provide the flexibility to work with TPL and GPS across jurisdictions on a range of different services.
Kriya – how does TPL pull all this together?
Kriya: It’s really easy if you’ve got good partners and we really understand each other’s businesses. Neil will tell you we’ve gone in with W2 as well with some of the sales guys on the W2 side where we’ve gone into meetings where we actually know each other’s products very well and we’ve come out a number of times and said ‘actually you’re selling my business and I’m selling yours’. I think that’s really probably the biggest story to tell on this – the more we work together the simpler it gets, the quicker and easier it gets, but actually we’re talking about some really complex stuff. The regulation is coming in thick and fast and we’re ahead of the game. I was at an event recently where people were asking about the competition and their experience with some of our competitors and through 15-20 minute conversations it became very apparent that our planning starts typically three or four months ahead of what the rest of the market is doing and that can only happen because we’re all aligned as partners that say ‘hey OK, what are you doing about PSD2? What are you doing about transaction alerts? 3DS2.0 is coming what are we doing?’ And some of those are technical aspects, some of those are more about the user experience changes, but the fact that we’re prepared to be able to align together in advance of the regulations coming into place and have a plan in place is really destressing for our clients and that’s important. I think we all equally play a part in that – it’s not necessarily the TPL team that takes the lead – it just depends on what the change is and how far we are ahead in our investigation, planning and assessment of that. But I think the most important thing is we’re very open so we’ll definitely share those things to make sure it’s the most seamless thing for our client base and our future client base.