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Fiserv: Financial Institutions Turn To Payments as a Service To Increase Capabilities and Lower Cost

Since consumer demands and financial technology have both experienced a considerable amount of change in light of worldwide events, financial institutions are coming under pressure to support traditional payments rails, and the ecosystem the way it is isn’t benefiting anyone.

Robin LoGiudice, Senior Director, Product Management, Enterprise Payments Platform, Fiserv
Robin LoGiudice, Senior Director, Product Management, Enterprise Payments Platform, Fiserv

To keep up with change and maintain strong security, financial institutions need a seamless method of managing, and Payments as a service (PaaS) provides the answer.

These are the views of Robin LoGiudice, the Senior Director of Product Management for Enterprise Payments Platform at Fiserv. In this guest-authored piece for The Fintech Times, Robin shares her thoughts on how a strong PaaS strategy could help institutions in meeting the ever-changing demands of the consumer.      

As real-time payments transform payment processing, Robin’s expertise in enterprise architecture, sales, product development, and client implementations facilitate the technical transition and accelerate the commercial benefits of implementing an enterprise payments hub.

Building on her software development and consulting experience at BNY Mellon, Citibank, and Deutsche Bank, Robin is driving product innovation and manages a cross-functional team dedicated to helping financial institutions modernise their payment systems. 

In a world of ever-changing consumer demands and evolving technology, financial institutions are feeling pressure to deliver the latest payment capabilities, and to do so quickly and seamlessly. To keep up and ahead of the pace of change, financial institutions must manage everything from infrastructures and applications, to access points, operational processes, and compliance programmes.

Such multi-management is difficult, and it is not easy to maintain or scale. This means the ability to access advanced payments functionality and reliable operational support without significant added capital expenditures or resources is highly desired. Payments as a service (PaaS) meets these criteria, allowing financial institutions to balance payment services investments with profitability, an important consideration in a world of falling interest rates and lower net interest income in which financial institutions are rethinking their payments priorities and capabilities.

Evaluating the Big Picture

To retain customers and compete, financial institutions are faced with offering more in the payments space while keeping an eye on operational efficiencies. Adding new capabilities requires making new investments, with the risk that they can quickly become out of date, necessitating more investment in a perpetual cycle.

Adapting existing infrastructures for a digital-first world can be difficult. As a work-around, some institutions create or procure single-purpose payments systems to accommodate new customer access points or provide support for a new payment rail to accelerate the rollout of new payment products. However, this approach can lead to a disjointed experience that does not align with customers’ expectations for a frictionless, focused service across all touchpoints, something that can often be avoided by working with a single provider.

Determining a PaaS Strategy

Financial institutions can benefit by outsourcing their entire payments processing business to PaaS solution providers. PaaS brings best-in-class payment experiences, access to new payment infrastructures and schemes, support for increasing volumes and compliance requirements, and access to dashboards and analytics. This also gives financial institutions vital time to focus on digital interactions and delivering the customer experiences the modern world is expecting.

When financial institutions transition to PaaS, the provider takes the lead on burdensome and costly tasks, including security, connectivity, compliance, and resilience. This can enable organisations to lower processing costs, maximise margins and reallocate specialist resources to areas that are core to an institution’s value proposition.

Completely outsourcing a payments operation to a trusted PaaS partner is financially and operationally attractive. However, it is not an all-or-nothing proposition. PaaS solution providers offer a range of managed service solutions, from simple ASP-based services to complete software-as-a-service options, depending on the level of customisation and control an institution needs. Alongside these services, providers offer support services ranging from basic technical support, such as infrastructure and database monitoring, to technical operations support, helping ensure essential gateways and application services are always available.

Evaluating the PaaS Fit for Your Organisation

Despite the benefits of PaaS, it is not a perfect fit for every organisation. When evaluating PaaS financial institutions will want to consider the following:

  • Strategic imperatives – Determine which payments features are strategically important to your institution and your future plan to serve customers. Evaluate how the institution is performing on those measures and what is getting in the way. Institutions that lack the talent or financial resources to develop best-of-breed payment services can leverage PaaS to expand their capabilities and build tactical and strategic agility.
  • Cost of current payments infrastructures – When payments processing is complex or siloed, it is difficult to calculate the total cost of payment operations. Capital expenditures, compliance, human resources, business continuity, and disaster recovery costs, upgrades, and improvements are just some costs that need to be considered in the development and management of payments solutions.
  • Logistics of adding a new payment innovation – Responding to market demands may not require a complete overhaul of existing infrastructures. Financial institutions that only focus on new payment capabilities and standards may miss the opportunities presented by innovative services, such as Request to Pay or open APIs, which can overlay existing infrastructures and cut across multiple payment rails.

PaaS: The 24/7 Payments World Opportunity

Solutions such as PaaS enable financial institutions to offer the resiliency and availability demanded by a 24/7 payments world. Additionally, in a world of falling interest rates and net interest income from customer deposits, PaaS can be the perfect solution to help financial institutions successfully balance payment services with profitability and stay connected, competitive, and relevant to customers.

By partnering with a trusted PaaS provider, financial institutions can protect their business and deliver solutions tailored to the all-important needs of their customer base, whenever, and however, their demands evolve.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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