With everything going viral these days, it is no wonder that banking should have followed the trend or that e-banking; debit and credit cards and online payments should have become so constant a presence in our lives that it feels like they have been there forever.
TPS is one organization that can largely take the credit for making e-banking more popular in Pakistan. According to its CEO, Shahzad Shahid, “TPS is a technology company. We have multiple departments; primarily we have a technology team responsible for developing software products and a customer support division which supports the implementations. We also have a project management team responsible for managing projects. Other divisions include sales and marketing, HR, finance.”
Starting off as a simple programmer, Shahzad Shahid made the proverbial step-by step advancement in company hierarchy, serving as project manager, project consultant, CMO and now as CEO at TPS. His step-by step progress is somehow reminiscent of the company’s own journey in the local banking sector.
Back when they started operations in 1996, Pakistan was struggling to talk about online banking. Customers could only conduct transactions from the branches where they had opened their accounts. TPS helped integrate this distributed banking system coming up with a payment system that assimilated the different branches to offer 24/7 banking services on ATMs.The second step included bringing all the banks together on one platform consequently paving the way for 1Link. The 1Link is a system that connects all the branches of the various banks across Pakistan and may be accessed by any customer with any bank account for transaction purposes. TPS also enabled, conceived and introduced IBFT (Interbank Funds Transfer) a unique service whereby customers can transfer funds from any electronic delivery channel to any other bank of the country in real time, besides helping introducethe online bill payment system.
Talking about the regional banking arena, Shahzad Shahid said that there are roughly 20 million cards in Pakistan where the total population is exceeding 100 million. Assuming that 80 million should at least have bank accounts or ATM cards, there is still 1/5 or 1/6 permeation of e-payment instruments across the country. He went on to explain that “debit cards actually mean that initially we used to have primarily ATM cards which could not work on post-terminals. The card was good only to take the cash out which meant that at the end of the day we were the cash consumption country. Now the country is moving more towards the purchase side and commerce can happen through the cards.”
Mr. Shahid further added, “The latest evolution in terms of the mobile banking, the agile banking, smartphones and these developments are paving way for electronic services which are easy for people to actually use. For example, using the internet on mobile phone has helped overall internet usage countrywide. So if you offer the financial services on the same device, the chances of higher user percentage, rises. If you even look at the current local trends, you’ll see the country is moving towards mobile banking because that’s the most available device that anybody has in Pakistan. That network is being leveraged and services are being offered on mobile devices.”
His views are supported by the fact that there is indeed an increased focus on internet-banking in the country. With more people now owning smartphones and tablets,which are relatively much cheaper devices, the likelihood of banking transactions being conducted over the internet rises exponentially. And once that happens, Mr. Shahid can even envision a future where customers will no longer need cards. “That one gadget, the smartphone, can be used as a card and a mobile wallet for all purposes.NFC and QR are going to become a reality in Pakistan in the next couple of years because instead of swiping the cards, we are going to bring more convenience, especially for low value transactions, he said.
So just where do all these innovations come from? For Mr. Shahid, it is about picking the right idea, which can come just by getting inspiration from international events. “Innovation requires mindset,” he explained, “and TPS has the mindset to recognize market gaps, pick up on the requirement and then do something about it. And the innovations they are working on at present? “Pre-paid cards, plus they have some very exciting experiences in the Middle East with one of the region’s top processors, Network International,” Mr. Shahid informs us.
Explaining more about what prepaid cards are, and how they could work, Shahzad Shahid explains how these would “require only a simple KYC to be issued. They could help Pakistanis travelling abroad and provide financial inclusion. So for instance, instead of paying cash to my driver or security guard, I’ll give him a card and using my mobile banking account, I can transfer his salary from my account to his card. He won’t even need to open up a bank account but will be able to start developing the habit of saving money in the banking net. Or a prepaid card loaded per-month with a budgeted amount could even help the more prosperous segment of society keep a track of their spending.
Speaking about his time as a CMO, Mr. Shahid spoke about how technology can bring about great convenience, especially if it is the correct fit for the market you are talking about. “Success does not really depend on how much you brand it –it certainly is a part of it – but more about what, at the end of the day, you bring to your end-customer,” he said.
Talking about the interaction between the CMO, the CIO and CTO of the organization, Mr. Shahid mentioned that“as a CMO he talks to all the roles that exist in the company working towards the customer side or towards the partner companies because electronic banking or digital banking today is not an IT function. It’s a very serious area of banking because, for us, 20 million debit cards mean that 20 million users are actually banking through ATMs.”
TPS has a vast customer base both local and global. On the international scale, this moves beyond just banks because financial services are offered not just by banks but also by payment processors which are the third-party companies inducted into the processing business, telecom institutions and even by their retailers.On the local front, almost 80% of the market share of Pakistan’s debit card marketis enabled by TPS technology including HBL, 1Link, UBL, Allied, Alfalah, and there are a good 20 plus banks using TPS technology for their electronic banking facilities. They are also working very closely with Ufoneand its recently launched U payments service.
Working so closely with so many different organizations has posed some challenges for TPS, admits Mr. Shahid. These generally include shuffling of priorities and weaker documentation. Since they have basically worked with banks which fall in the private sector, Mr. Shahid was of the opinion that they have ‘matured a lot in the past 15 years.”
Talking about the availability of 3G and 4G in Pakistan, Shahzad Shahid opined that it “is an amazing thing.In a country which has got a hundred million mobile phones, think about the potential this small gadget has – and everybody has this gadget today.Since the mobile network is nationwide, when you have 3G on your phone, a lot of things become a reality!Even for the more improvised segment of society, consisting of people like rickshaw or bus drivers, once they smartphones with 3G/4G, a lot of their applications can be pre-loaded on the phone. Commerce and payment transactions should increase.”
TPS has helped to develop e-banking in Pakistan. Before 1996, Pakistan had very few e-banking experts. TPS proved to be an academy in the country educating people in the ICT and banking sectors, in particular, about what the Payment Switch is. “The other contribution,” said Mr. Shahid, “was more about what we have delivered directly to the industry that we are serving. Pakistan, unlike most of the other countries in this region, gives you a facility whereby your card can be used at any ATM across the country. All the ATMs across the country are inter-connected and we feel that TPS has played its role.”
Talking about mobile banking and TPS’ vision for the future, Shahzad Shahid said that they do not expect people to continue to leaning on agents for transactions. Gadgets like smartphones are now going to help bring about that paradigm shift from serviced to self-service. “TPS believes that Pakistan, by 2020, should have e-banking permeation to at least 80% of the people who earn a reasonable amount of money, taking into account people who are actually not earning money by themselves. Services such as QR and NFC, should become a reality hence also lowering transaction costs,” he added.
“Pakistan,” he concluded, “is a country which has people serving top brands globally be it financial or non-financial. We have the potential as long as we remain true to our homeland and serve it honestly.
