Payment portfolio migration – avoid the pitfalls and reap the benefits
Philippe Eschenmoser is head of business consulting at SIX Payments Services
Service, and thus platform migration, is to be approached with caution; taking up both time and money and presenting a whole host of potential risks. But if managed well, then it can be far less painful than imagined. The benefits of changing the payments portfolio over to a service provider with a modern and flexible platform are inherent and far outweigh the downside of staying with a provider whose solution is a poor fit, writes Philippe Eschenmoser .
Indeed, many of the processing platforms currently in use are now up to 20 years old. These legacy infrastructures were simply not designed to be flexible enough to easily accommodate new payments methods such as e- and m-commerce or contactless, or indeed any other new business requirement that may emerge. A secondary issue is that the volume of transactions has increased substantially; older platforms were not designed with such volumes in mind.
The end result is a hotchpotch of add-ons and patches. This effect is cumulative: the system becomes less efficient as a whole and its transparency and workability becomes much more prone to risk.
A series of one or more pain points for issuers or acquirers may come together to force change or at least think about it. Both issuers and acquirers are much more open to the idea of at least opening conversations with other providers when contracts come round for renewal. This is especially so where a monopoly has previously existed and perceptions of service are poor.
But understandably, there is great unease about migration. How then, can a services provider’s offering and platform stand out from the crowd and work in partnership with customers to make the whole migration process as pain free as possible?
Firstly, the customers themselves need to have a good understanding of what is actually involved. For example, acquirers’ customers, the merchants, have thousands of terminals plus a whole raft of customised solutions. This is a question of being able to adapt and acquire new processes on both sides. It requires investment in terms of time and money while ensuring that business continuity is maintained.
Indeed, migration covers a whole raft of operational aspects and reaches deep into operational units, customer care centres, call centres, bank branches, security and fraud centres plus the marketing function. At some point during the migration process they will all need to change the way they currently work. And for quite some time they must consider the upcoming migration in every decision they take.
The human element is perhaps one of the most fraught areas: the existing team needs to continue its work on daily operations, including necessary enhancements. But at the same time the capacity to implement the new platform and bed in the expertise in the new technology is required. Hence there will be additional staff for a lengthy period of time and they need to be able to work together to define the starting point, provide precise procedures, including approval and documentation, on whatever changes are taking place while the migration project is developed.
It is common to run old and new platforms in parallel. Several staged ‘bridge programmes’ between old and new are also required. They must be stable, properly tested and highly functional because they are bearing the entire load of the ongoing business until the next phase. Finally, fall back scenarios also need to be put into place at every step.
Successful migration also relies on the cooperation of the outgoing supplier – without this it is pretty much impossible to ensure migration is seamless – simply because the new platform would be working blind.
Perhaps one of the trickiest areas when it comes to migration is the data itself. Where dynamic data is concerned, changes may be made right up to the point at which the data is migrated and the checks and balances that need to be in place to make sure nothing has been missed must be robust, secure and reliable to provide the required level of comfort.
Customers also like the reassurance of working with someone with past experience of migration. Obviously, every migration is unique, but having had the experience of doing it before does give out the right signals in terms of being able to learn from previous experience and bring that to the current situation.
Being flexible and willing to accommodate the intricacies of a new customer does much to add to comfort levels too. The platform clearly needs to have an economy of scale when it comes to the actual mechanics. And being able to compete on price by having a critical mass of transaction volume is also key. But being able and willing to adapt a platform to the customer’s individual needs is also a core attraction for new clients.
Ultimately, the whole process is not, realistically, going to be without hiccups, delays and pain. It is very easy to define and implement the new target platforms in the sense of functional and non-functional requirements. But the real challenge is to design and walk the migration path from the old platform to the new one. The process can be made much smoother by working as a team to identify the possible stumbling blocks and creating a workable timetable and recognise that the technical aspects are rarely the issue, more that the less tangible aspects like good communication, realistic expectations and a proactive ‘can do’ approach are crucial to success.
