A managed service model is the preferred method to accelerate the implementation of real time payments and improve time to market. © MasterCard Academy On Web (Source: Mastercard Advisors Analysis)

Characteristics of a Managed Service Model

Deployment
The software runs on infrastructure located in local or regional data centers.

Monitoring
Continuous (24/7) monitoring of the service.

Software Support
Service providers have specialists supporting the software inquiries on a 24/7 basis.

Customer Support
Customer service teams provide help desk service.

Benefits of a Managed Service Model

Costs
FIs can reduce capital costs (e.g., hardware) as infrastructure is pre established and accessed via cloud technology.

Security and Control
While FIs do not control the physical assets, bank grade security is maintained.

Speed
FIs reduce deployment time as infrastructure is pre-established, mitigating risk.

Resource Commitment
Scarce and valuable IT resources can focus on innovation and business operation improvements rather than maintenance, with no need for onsite hardware.

Upgrades
FIs no longer need to carry out hardware upgrades, as service

Payment Platform Deployment Options

There are two options for payment platform deployment: CaPex oriented (CO) or Opex oriented (OO). Operators can opt for a national or regional managed service model depending on market conditions and the payments ecosystem agenda. The options can be differentiated based on deployment level.

Managed Service Versus On Premise Hosting

CO: Hosting the payment hub on premises to keep the technology in house requires an upfront investment in infrastructure, process development, and skilled resources. Benefits include direct control over data and systems security and reduced third party reliance risk.

OO: Allowing a third party to host the payment hub facility as a managed service requires less upfront investment in terms of infrastructure but requires greater operational spending in terms of licensing fees. Benefits include increased agility and immediate access to the latest technology upgrades.

Internal Smart Payment Hub Versus Point Solution

CO: Building a smart payment hub within the bank to connect to RTP requires time and upfront development costs. Benefits include the retention of control of payment routing within the bank.

OO: Connecting directly to a payment operator with a point solution reduces the upfront cost. Benefits include reduced time frames for implementation.

Off-the-Shelf Versus Custom Solution

CO: A customized solution requires a high upfront investment of time and development costs. Benefits include meeting all business requirements.

OO: Proceeding with an off the shelf solution lowers the upfront investment but may require some compromise on requirements. Benefits include reduced cost of implementation and access to the latest global innovation.