Reimagining Payments through National Payment Switch


Posted October 7, 2020 by panamax

National Payment Switch by Panamax helps set up a cost-effective payment system in the country while providing seamless customer experience.

 
These are interesting times to be in the payments industry. While the world is battling with both health and economic challenges, the payments industry has an uphill task to ensure more and more people can take advantage of the cashless boom. This is definitely not a new concept but cashless has become ‘the’ thing since social distancing measures have come into place. It would be unfair to ignore the importance of a National Financial Switch when discussing the measures to go cashless. The switch has proved crucial in promoting financial inclusion, economic prosperity, and supporting innovation in fintech solutions.

The current payment ecosystem is driven by the individual incentive of each bank and does not take the advantage of a collaborative approach of a market-driven incentive. During a card payment process without a national payment switch or a national financial switch in place, the card issuer and the acquirer need to have a direct relationship with the card scheme. If the card issuer and acquirer are not from the same institution, they cannot interact directly. They must be routed via the card schemes for any payment authorization requests, thereby paying a fee to the credit card company. Do you see how this increases the cost of a payment cycle while complicating it for the customer?

A national payment switch is the answer to these fundamental drawbacks that ensure financial stability by inculcating a cost-effective payment system and creating a level playing field for all the stakeholders involved in a payment process. Upgrades to the financial technology and global financial liberalization have led to major updates in the architecture of large-value, retail, and securities payment systems, as well as the processes, and procedures followed by operators, administrators, regulators, and users of the systems. This system has so far been implemented in several countries across the world and several others are joining the movement.

Let us understand what a national payment switch is and how it is helping governments create an inclusive atmosphere for digital payment stakeholders to flourish.
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Contact Email [email protected]
Issued By Panamax
Phone 7187138417
Business Address Garden City, New York
Country United States
Categories Software , Technology , Telecom
Last Updated October 7, 2020