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National payment systems in the open era

The basic movement of money from A to B is changing. It’s becoming faster, embedded and more open ecosystem driven.

Ilkka Korkiakoski / October 18, 2017

Whereas payments used to be cleared and settled in days, now funds are available to the beneficiary within seconds. Whereas banking and payment products used to be offered exclusively by banks, now new players are entering the market and providing new real-time and value-added services with superior user experience.

Central banks nowadays have a new role as financial enablers. They are responsible for operating a fit-for-purpose national payment system and infrastructure. Moreover safeguarding its future and using it to deliver on national policy objectives. These range from promoting innovation and financial inclusion to stimulating competition, improving security and risk management, and breaking cash dependency.

In our recent white paper, National payment systems in the open era, we highlight the key design principles and challenges when implementing a national payments infrastructure. Based on our experience, we examine selected product propositions and offer recommendations on what to do, who to involve and how to move forward when implementing a national payment system.

Design principles

National switch projects are huge undertakings. Collaboration across borders, between stakeholders and industries is essential. Central banks must drive this collaboration, but also work with stakeholders to devise design principles, technical features and use cases, which allow 'co-petition'.

It is this 'co-petition' model that will create the virtuous circle or network effect to drive coverage and innovation. Plus, value to end-users in terms of competitively-priced products and value-added services that meet their needs.

With regard to use cases, getting the first one right is particularly important, especially when introducing digital payments to the un- or under-banked. It encourages customers to switch from their existing payment methods. It also stimulates regular, habit-forming usage, which goes to changing long-term behavior.

Use cases influence how the system and integrations are designed, and vice versa. They also influence how participants map existing payment products to the infrastructure, how they bundle and sell products, and develop new ones. We include our make-or-break project learnings.

How Tieto can help

Selecting the right long-term partners to develop or re-shape a national payment system is essential. There is no substitute for knowledge and experience. This makes the selection of partners that have experience in managing similar complex projects and multiple, sometimes competing, stakeholders a pre-requisite.

Partners who can draw on what worked and did not work from other markets, and have good local and technical knowledge are also desirable.

Tieto has strong relevant experience working with multi-stakeholder groups across Europe and Africa. We've designed, built and implemented everything from national payment systems to interbank card and ATM switches, and PSD2-compliant mobile payment platforms.

To find out more, please see our white paper.

Ilkka Korkiakoski
Head of Payments, Tieto

Ilkka has broad experience in IT and Financial Services sectors and has worked in many challenging roles during his 20+ year career. After his graduation he co-founded a successful software company Gui Systems Oy, whose products are still today market leaders in their segments in Finland. During the recession times in the 90’s he worked as a corporate analyst in a government rescue team focusing on financial restructuring of distressed SME companies.


Ilkka Korkiakoski

Head of Payments, Tieto

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