4 Tips to Build Your ISO20022-ready Payment System
The payments industry is undergoing a huge change. If you are here, you know it already. Payments, like so many things in our lives, are going real-time, in line with our fast-paced life as consumers or professionals. Technology evolutions such as APIs, and instant (real-time) payments, ISO20022 migration, and regulation, such as PSD2 also support this move.
Several new entrants challenge the status quo and claim their share of the respective fees. Others use the payments as a vehicle to grab clients and offer other value-added services, while the established players modernize their stack in order to defend their grounds and remain relevant for their clients.
In this fast-moving environment, you may find yourself struggling with the Build vs. Buy decision for payment systems and applications. Well, things are not much different compared to any other complex software decision. It’s a difficult question with many different things to consider and is usually not black or white. Nevertheless, payment systems are always quite sophisticated. Some of the modern demands include support for multiple messaging protocols. Traditional SWIFT MT, ISO20022, real-time, connectivity with alternative providers, multiple clearing systems. And the list goes on.
Taking a hybrid approach, by building your system using modules and integrating external solutions is usually a good idea if you are looking for a good compromise between costs, speed, and flexibility while remaining platform-independent.
In this article we look at what we think are the four most essential points to consider when starting the journey to build your payment software.
1. Build faster with ready-to-use payment libraries
Accelerate the development of your payment system by using off-the-shelf financial messaging libraries. SWIFT MT and ISO20022 standards are not always easy to understand, not to mention the rules of the SEPA Clearing Houses requirements. Using the right library will help you accommodate all the formatting requirements (both syntax and validation rules) accelerating your development. You can also find specialized products such as mapping and translation of SWIFT MT to ISO20022 and vice versa, and dedicated solutions for Target2.
2. Stay compliant with no extra effort
By picking and integrating the right payment libraries, it will also ensure that your systems are always updated with the ever-changing rules. You will get the last updates directly in your application and concentrate on other key things to grow your business. If you think that this is not that important, maybe it's worth considering it again. The speed of change in rules and financial messaging standards is constantly increasing and the opportunity to reduce the effort needed to stay compliant is a lifesaver.
3. Think long term
When planning about building a new payment software, it is easy to forget about the costs you will need to sustain in the long term for administration, maintenance, updates, and the scalability possibilities of the solutions selected. However, the truth is that these are vital things to keep in mind when planning long term. Invest in a reliable and sustainable solution that can work well over time, and quickly evolve and scale when the business demands it. Know your costs, don’t pay for software you don’t really need, and make sure that your current decisions give you the right amount of flexibility tomorrow.
4. Find the right Partner
This is very important. Software partners will have to work with you almost every step of the way to make sure the software they provide will help your business thrive. You should make sure that not only they provide the right product, but also the support you require. Both during the project and the operational phases. How will you spot them? They are usually the ones who really understand your problems, they think strategically, like you, they build their own products with their own tech team and deliver first level software built according to the latest tech trends.
These are all characteristics that you can find in FINaplo libraries, by PaymentComponents.
A proven solution that quickly integrates with any payment system and application, allowing for the proper flexibility to thrive in today's fast-changing financial world.
