Card Management and Transaction Processing Technologies: A Primer

by Zilvinas Bareisis, May 2, 2014
Industry Trends
Global

Abstract

This is the first report in a series on card management and transaction processing. It introduces key technologies and proposes a framework to understand the breadth of capabilities of various vendors and how their solutions and services fit together.

Financial institutions around the world have been looking at options to renew and transform their retail payments platforms. Despite advancements in mobile payments and digital wallets, cards are not disappearing any time soon. And while many financial institutions are stuck with legacy solutions, modern transaction processing systems can be at the heart of the banks’ cards and retail payments offerings and act as a hub for a broad range of transactions from different channels, devices, and payment instruments.

There are many vendors and service providers with relevant offerings in this space. However, navigating through their capabilities and understanding how they compare to competitive offerings can be daunting.

Celent is embarking on a series of research projects to gain insight into the following questions.

  • What are the demand drivers for card management and transaction processing capabilities? Who needs them, and why?
  • What options do the clients have to acquire those capabilities: build, outsource, etc.?
  • Who are the main players in key categories – software vendors, processors, system integrators / implementation partners?
  • What are the differentiating features to look for in solutions?
  • Which vendors distinguish themselves in terms of solution capabilities, market presence, and customer focus?
  • What can the industry learn from banks that have recently transformed their retail payments infrastructure?

In the report Card Management and Transaction Processing Technologies: A Primer, Celent introduces key card management and transaction processing capabilities and technologies. The report also describes the options customers have to acquire those capabilities and provides an introduction to the vendor landscape.

“Card management and transaction processing technologies are more relevant than ever,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking group and author of the report. “We intend to start our research with a broad overview of vendor capabilities, and then focus on transaction processing systems (switches), card management systems for the issuers (not acquirers), and selected specialist capabilities. We will be reaching out to relevant players with an invitation to participate in our research.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Overview

2

An Overview of Card Management and Transaction Processing Technologies

3

Card Management Systems and Related Specialist Capabilities

5

 

Pre-Transaction Activities

5

 

Post-Transaction Activities

8

Transaction Processing Systems and Related Specialist Capabilities

10

 

Device Driving

10

 

Transaction Routing

11

 

Transaction Authorization

11

 

Transaction Clearing and Settlement

11

 

Specialist Services

12

Card Technology Capability Acquisition Options

16

An Introduction to the Vendor Landscape

18

What’s Next

21

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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