The availability announced last month of ACI Worldwide Inc.’s newest integrated payment service is a step in the right direction to prepare merchant acquirers, retail banks, and ATM and payment processors for market changes ahead, one analyst contends.
Any new payment-processing hardware or software has to take into account a changing payments industry, Rick Oglesby, senior analyst with Boston-based Aite Group, tells PaymentsSource. And platforms that revolve around the magnetic stripe cannot adapt as easily as technology built for the latest payment types, he says, noting EMV smart cards appear poised to enter the U.S. market while mobile payments loom on the horizon as well.
“The payment industry is in a state of flux right now,” Oglesby says. “If you’re going to be adopting an authorization engine at this time, it’s a matter of making sure you have a highly flexible [option] able to adapt as changes come through.”
The BASE24-eps 11.1 is designed to do just that, ACI noted in a March 20 press release announcing the product. Merchants may use the latest 11.1 version of ACI’s Base24-eps to acquire, authenticate, switch and authorize financial transactions.
“As the POS environment is changed over to EMV, some transactions will come through as an EMV transaction and some as a magnetic stripe transaction,” Andy Brown, ACI director of product marketing, tells PaymentsSource. “EMV [purchases] have a much richer set of transaction data with more secure information. So these can be scrutinized in more detail to check for fraudulent use.”
Among the improved features of the 11.1 is what the service can do before an authorization, says Brown.
“In authorizing a transaction, BASE24-eps will often need to check with a core banking system about the balance in the account or other systems,” he says. “Now in the preauthorization step it can check other systems before going through the authorization. So you might check a fraud-detection system to see if this is fraudulent before taking the transaction further, or validate with a mobile operator the prepaid account details before processing a top up request.”
The changes in payment platforms are important, but so are the different products offered by financial institutions, says Brown. Debit and prepaid cards have unusual controls, but they also have subsets that can have specific controls, he says.
“Perhaps there is a prepaid card specifically for overseas travel, or a prepaid card for children,” Brown says. “Corporate cards similarly have specific controls; some may limit spending to travel and expenses. Financial institutions need that flexibility to segment their products so they can be designed for needs of the customers they serve and the channels in which they will be used.”
BASE24-eps can serve different roles based on need, says Brown. It can carry out the authorization process for some organizations or do checks for fraud or account balances for others, he says.
Retail payments accounted for about 48% of ACI revenues in 2011, says Brown, adding they cover more than just the payments processing and authorization engines.
ACI will guide clients through the process of adding 11.1 to their existing BASE24-eps system, Brown says. There is no additional cost to current users, as 11.1 is available as part of the product-support package. Users of older ACI products need an upgrade package, while those without an ACI retail payment system would need to license BASE24-eps 11.1, Brown says.
Clients pay a monthly licensing fee and a monthly product-support fee, Brown says.
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