KENYAN BANKS SET TO BENEFIT FROM CARD PROCESS OUTSOURCING DEAL

Investment to bring down banking costs considerably through increased efficiency.

Kenyan banks are set to benefit from a credit card outsourcing partnership from Universal Payment Services, a leading transaction service provider of payment card services in the Middle East and Africa.

The banks stand to benefit from a full spectrum of smart card solutions for their customers through third party card sourcing by UPS, allowing them to concentrate on their core business of taking deposits and providing loans, ultimately cutting down costs considerably on human capital, hardware and software costs.

Through UPS, banks will now have the choice to choose the Visa or MasterCard International banking cards which are accepted globally, plus a host of other card solutions. In Kenya, it is only Paynet that has successfully completed EMV (Chip) Acquiring certification for its outsource Visa customer banks who acquire ATM transactions and for its group owned ATM network, PesaPoint.

UPS will install Card Personalization centres certified with both Visa and MasterCard to produce debit and credit cards and a certified call centre facility to attend to the bank card customer queries

“UPS will ensure that banks are able to deliver more value to their customers by facilitating cost efficient transactions and delivering payments through a single gateway using certified technology with all major card schemes. Ultimately, this will lead to revenue growth due to improved efficiency and reduced operating costs,” said Mr Ray Vincent, UPS East Africa Regional Representative.

Mr Vincent said UPS, which had invested in card management systems with the mandated certification from both Visa and MasterCard currently provided its services to three banks in Kenya and was targeting more financial institutions due to the exponential growth and potential of the card business in Kenya. The banks are Prime Bank, Chase Bank and First Community Bank.

He said the target of UPS partnership was small and medium sized banks that would benefit from the economies of scales through outsourcing and therefore cuts down costs as they do not have to purchase a retail banking system to manage retail customers. The banks will also be saving upfront capital investment in systems and people.

Mr Vincent said UPS will work out reasonable pricing models which will allow the financial institutions to pay a reasonable setup fee and then a minimal monthly fee to maintain the card business for its customers.

“This is possible because no one bank bears the cost of the systems rather it is being shared by multiple banks who join with a Third Party Processing Company like UPS,” Mr Vincent said..

Mr Vincent was speaking at a Nairobi Hotel during a seminar is to create awareness of UPS outsourced solutions for Kenyan banks. The objective of the seminar was to create awareness of certified outsourced solutions which enable Banks concentrate on its core business and service delivery, and hence reduce the burden of ongoing capital investment.

The seminar was also addressed by Mr John Wanyela, the Executive Director of the Kenya Bankers Association.