Why specialized processor is more profitable and convenient than bank’s own one?
If you are still deciding whether to build your own processing center or renew existing one, information below is for you.
Before you start this project ask yourself
In-bank processing center starting costs
- Is it possible to start transactions processing in the short terms or it will take years to do so?
- Is it possible to meet budget agreed with shareholders?
- Will your new processing center reach the service level higher than the leader specializing in this field?
How much is to build and support 30-40 meters server-room processing center?
- Servers and other equipment – $300-500 thousand
- Fire-prevention, telecommunications, no-break power and other systems – $400-500 thousand
- Front and back-office system – no less than $150 thousand
Add here the room rent, repair costs and high skilled IT-specialists’ salary. Moreover every five-seven years you will need entire equipment and software renovation.
Annual banking processing center’s costs
Every year you will have to pay 17-20% of your initial investment to support hardware and software. This is more than $250 thousand not including salary expences.
- Audits and certifications
- Rental expences
- Equipment and telecommunications repair
- Software update
Can your bank easily cover these costs and to make profit on cards issuing and processing if the cost is too high. It is much more profitable to share these costs with others?
Specialized processing center: advantages
Ukrainian method when all the supplementary business functions are fulfilled by bank tends to become a history.
Which processing center to choose?
- Most Ukrainian banks in Ukraine receive services of specialized processing center
- Specialized processing center reaches the economies of scale. Providing services to dozens of banks these companies divide banks expenses between all their customers
- Banks inquiries for new functionality create favorable environment for card business development while implementation costs are divided between all the interested parties.
While choosing specialized processing center it is essentially to pay attention to the list of the customers of such company, particularly to:
- The number of the customers
- The number of cards issued by these banks
- The number of transactions processed to estimate the processing center load
- Whether the processing center’s customers issued innovational card products
- Issuing volume of the banks started to process their transactions in this processing center during the last three year