Kenyan Banks to benefit from outsourcing of credit card processing.
Investment to bring down banking costs considerably through increased
Kenyan banks are set to benefit from a credit card
outsourcing partnership with Universal Payment Services (UPS) a leading
transaction service provider of payment card services in the Middle East
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
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.