As recent as 5 years ago it was difficult to imagine a financial service provider to rely on a cloud service for a sensitive and mission-critical task of a secure payment service.
Lets us look at the key factors driving the rapid adoption of SaaS these days for mobile money and payment services.
Access to globalized payments
Although it would be premature to name payments a commodity in 2019, the clear trend for the payments industry sector to become de-centralized and global has to be acknowledged. A drive towards de-monopolizing the payments space is ongoing in the European Union on the regulatory level, as well as it is seen that global players such as EBA, SWIFT, TransferWise, Ripple and others are actively working towards seemless cross-border transfers with minimized interchange or transaction fees for participants.
SaaS serves best at making payments interfaces accessible, simple and global for its service users.
Hassle-free innovation
With SaaS, a new innovative payment service – be it another type of payment transfers or a sophsticated crypto payment at its core – is just a mouse click away. Heavyweight scoping , vendor selection and the hassle of sustaining a multi-node on-premise architecture is a thing in a past.
Security
Supported availability of secure message communication frameworks and methods makes the in-house security teams obsolete. Another perk is the leveraging acquired by SaaS through multiple tenants served — service providers can benefit from strictly adapted risk rules and fraud prevention across multiple channels and users.
Tighly followed regulations for personal data operation and storage by SaaS, such as PCI DSS and GDPR compliance, take the task off the shoulders of the service providers.
Availability
Built-in industry-grade resiliency and high availability SaaS mechanisms ensures that your payment service is available 24/7 with minimal annual downtime. “5 nines” are on-par achivable with most of the on-premise deployments. The availability factor is now mostly driven by infrastructure rathen than by software.
Performance
Minimal latency times with SaaS do not and negligibly differ from the on-premise benchmarks.
Scalability
This is where SaaS gives a real competitive edge to financial services providers. Extending with SaaS is narrowed down to a pure virtual task as opposed to the heavyweight in-house platforms.
Multi-tenancy
Segregation of tenants on a single cloud platform is ensured for regulatory and business risk reasons.
Localization
SaaS is no longer a “take it or leave it” offering. Its APIs and a customization model allow tailoring of the pre-selected functional packages to a local market.
Big data, AI and third party services
Analytical services and intergation with machine learning franework make use of the accumulated data to solve a number of applied tasks, such as identifying patterns for customer retention to offering tailored services to consumers.
Risk-aware service rollout
Heavyweight in-house software platforms typically require a significant upfront investment. Such an approach proves challenging for fintechs trying out various payment business models.
Trials and smaller SaaS packages with ready-made service make it easy for startups to validate a market hypothesis at minimal costs. Flexible pricing within SaaS models enable efficient RoI and reduce the TCO in the first years of service operation.
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