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Sat 30 Sep 2006 08:00 AM

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Easing Payment Processing

Ramesh Mengawade, founder and managing director of Opus Software, is helping companies overcome their transaction processing problems

Opus Software Solutions provides software solutions for the financial services industry worldwide.

Its Electra Suite of Applications, which had made inroads in the Middle East, provides a solution for businesses that handle payment transactions across multiple channel.

Its TradeNow Suite of Applications provides order routing, direct access and straight through transaction processing for brokerage houses.

Arabian Banking & Finance spoke to Ramesh Mengawade, founder and managing director of Opus Software, about the company’s strategy in the Middle East.


Why did you set up opus software?

We started seven years back with a focus on having differentiated solutions in the payment space.

My background is 20 years with HP and NCR in the payment space.

I felt there was a need for more flexible solutions in the market where financial institutions could reduce operating costs by consolidating the various payment systems.

Most of the financial institutions were scared of introducing new products in the payment area because they had legacy systems and it required a huge amount of change to be done on the back end.

What challenges do people face in the payment area?

One is acquiring payment transactions.

You need different channels to acquire payment transactions, whether it’s mobile, ATM, point of sale or teller.

Historically, what has happened on the acquiring side is these systems have been developed as silos.

There’s not been a unified view of the customer for the financial transaction.

For example, I might have a home loan already with the bank.

If I go on the internet or ATM channel, because the systems are not integrated, the customer will invariably be flooded with advertisements about a home loan.

Sometimes that can put off a customer.

It doesn’t give what is called personalised service, a single view of the customer across multiple channels.

That has been the major challenge on the acquiring side.

On the issuing side, the problem there has been most of the core banking solutions have been offering the loan products and credit cards have worked as a different silo.

Your debit product is partly with core banking, partly with Switch.

Customers have multiple cards, multiple pins; banks have separate collection systems and separate fraud systems

for each of these products; and that has increased costs.

Our objective was to integrate the channels and integrate the various silos operationally within the bank to reduce the cost to the financial institution.

The first objective has been to concentrate on the acquiring side, which is where we’ve focused in the Middle East.

We’ve come out with a product that can take transactions from various channels, you can have internet banking, ATM, point of sale, web or mobile; all of them can come into our solution.

We in turn interface to the data warehouse and core banking systems to provide a unified view.

It’s called an EFP Switch.

I thought that problem was normally solved by throwing out systems and starting again?

It’s not possible because there’s huge investments been made in various channels by financial institutions.

The idea has always been to link your knowledge of a customer and leverage it while interacting with all these channels.

That can be done only when customer interaction can go through a single channel manager, or EFP switch.

A channel manager will not provide things like ATM and point of sale or kiosks, which are more complicated.

What are silos?

Now, everyone is going towards open systems, but typically, on the core banking there will be mainframe systems.

A good thing that has happened is that most of the newer systems are open.

But there will be legacy core banking systems running on mainframes, there will be data warehouses running on this thing.

The idea is to integrate them through messaging, whether it’s XML or something else.

What we’ve done is what’s known as a user defined mapper, where they can define on a screen how they want to interact with a data warehouse.

It makes financial institutions more empowered.

If old systems are being thrown out and replaced, doesn’t the need for your system disappear?

No, interacting with channels requires authentication and identification.

When you go to an ATM, you don’t enter your account number, you enter your card.

On the internet, you use an ID password.

There’s a whole challenge of identificayour backend data warehouse, or core banking, internet or mobile channel.

Your product sits here and takes information from different channels?

Except on the card side, we replace your existing system.

With these legacy systems, there are a lot of issues.

Typically, it takes 4-6 weeks for all those interfaces to be done; it’s typically a two or three month project.

Who are the potential customers?

We’re looking at people who have issues with any of the channels and are looking for a change.

Anyone who’s got a legacy system that’s not compliant with Visa or Mastercard, those are our entry points into the customer.

We’ve been very successful targeting certain vendors’ products that we know are obsolete.

We go for those customers and change that ATM or point of sale switch with our product, which is more encompassing.

The product is Electra.

It has three elements.

One is Electra Switch, second is Electra Payment Gateway.

It is everything on the web, Verified by Visa, any e-commerce related thing.

On the payment side, it is called Electra Card.

These are the three separate products that we sell.

Some customers buy all of them.

Are the products only really applicable to older systems?

We have a lot of customers who have InfoSys, i-flex and still they work with us.

It doesn’t matter, this is a complementary solution that none of these core systems can offer.

It is not the inefficiencies of core banking that we are trying to capitalise on, it’s connecting silos across multiple channels.

80% of all e-commerce transaction in India go through our product.

We’ve got a presence in places like Indonesia, Cambodia, Vietnam, Taiwan and we’re moving into China.

What’s your long term plan for the company and our region?

We set a target of 25 customers and we’ve got 22 in East Africa and the Middle East.

Long term, we’re looking at partners like OCS Infotech to set up some sort of infrastructure that people can use.

It would be like an ASP.

In the US, 65-70% of this is outsourced.

What you’re trying to do is give the running of this technology component to someone who has got the core competence.

Financial institutions are open to the idea of outsourcing.

“Financial institutions are open to outsourcing.”

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