Category Archives: Interswitch

How Interswitch extends Banking Reach – Part II

Interswitch focuses on solutions for African banks and financial institutions, integrating their payment systems for seamless interaction, regardless of ways in which customers choose to connect  or transact with their banks. These can be through phones, tablets, ATM’s, card, and even wearables in the future.

Banks customers can make payments from wherever they are, for batch payments, recurring payments, and also receive SMS updates on anything from remittances, send or receive payments between banks and all mobile money services, make international payments etc.

Financial institutions outsource these complex interactions and switching processes to Interswitch and can reduce their costs, leaving them to focusing on marketing, growing and enriching their customer experience. Interswitch also advises licensed financial institutions on hardware, licensing, vendors and other decisions in a way that is much more affordable than using in-bank teams.

For financial outlets, like malls, restaurants, and stores, where you’ll sometimes find rows of needless ATM’s or card reading machines taking up valuable floor space, one ATM or device managed by Interswitch  could serve the transaction needs of most diners, customers or  shoppers at the mall.

And behind all these, are Interswitch safeguards to manage  risk,  authentication, and other elements of security processes. They deal with attempts at ebanking fraud & card fraud and are up to date on the latest security features and changes in the financial sector. Introducing and integrating with new standards within banking are also a part of the Interswitch – so moves like the change to chip & PIN are seamless, and  Interswitch is the only PCI certified switch in Kenya – a security standard to process leading card brands like Visa, MasterCard, and American Express. Interswitch Verve Card designs

Finally, the banking world is very competitive and there are moves in Kenya to use loyalty programs for retention. This is possible with Interswitch, which already runs loyalty programs for several banks and brands in Nigeria – tracking customers usage  and transactions, so that financial institutions know, manage, reward, and retain key customers.

How Interswitch extends Banking Reach

Interswitch products have been deployed in many African markets and can be used to extend services to bank customers in a variety of ways:

  • The Payment Switch is used by many banks; In Kenya they enable customers of dozens of banks to use each other’s ATM’s and to do account to mpesa and mpesa to their bank account transactions, even at ATM’s where they don’t have to use bank ATM cards to transact. In Nigeria, Interswitch is at at all commercial banks meaning a total network of 13,000 ATM’s are available for customers to use, and in Uganda there are 13 banks with 280 ATMs. Interswitch has just launched in Tanzania, their 6th market in Eastern Africa. Customers of these banks enjoy lower costs of transactions than with mobile providers and seamless transactions as they  cross borders to trade within Africa.
  • Mobile solutions. An example is Centenary Bank Uganda whose customers have mobile wallets known as CenteMobile with which customers can pay their utility bills, take part in fundraisers and transfer funds, among other bank services.
  • Agency Banking & kiosks: Interswitch powers agency banking which is a customer delivery channel that many banks are now adopting to extending their reach, while controlling costs. Interswitch powers all KCB Mtaani – bank agent locations as well as the teller kiosks in Nakumatt where customers go to load points, get mpesa and airtel money or buy airtime.
  • Banks Card : Verve is the leading card brand in Nigeria, and the chip & Pin card has been issued to almost 30 million customers of various banks in Nigeria, West Africa and soon Eastern Africa, starting with KCB and UBA. Verve cards are accepted on Paypal, and one new feature enable Verve cards to send one time pay codes to friends or family members so they can withdraw set amounts at ATM’s.
  • Loyalty Programs: Interswitch powers loyalty programs for banks such as First Bank Nigeria; Customers earn points for carrying out transaction on their bank accounts  or by using their Verve cards; They can get cash back for card usage, and can get gift items and discounts at select merchants, some of who are online.

How Interswitch enhances Banking

Interswitch have a variety of products that are incredibly useful for financial institutions and for financial management at other institutions. They are easily deployed, and can be used internationally, easing the process of taking company financial systems across Africa’s borders which remains a challenge for many growing and large institutions.

For banks, micro-finance institutions (MFI’s), fund managers, pensions, savings &credit societies (SACCO’s), and pension administrators, Interswitch enables them to analyze incoming payments, see which of the many bank accounts the money was paid into, what it was for, see account balance, and set us SMS notification. The managers can then initiate or have the system automatically pay them out such for funds transfers to top up other accounts, or to make statutory payments.

The Interswitch business reporting tools integrate with whatever accounting system a financial institution has and have an in-built loyalty system to enable the business development and sales staff at these small institutions to know who their main customers are, filter and see the trends of what the customers like, and see how their finance products are performing. The institution managers can get such key business reports, via their mobile phones or tablets,  in real-time even if they are not in the office.

The Interswitch systems help to assess staff performance with a view to enhancing perks through an easy way to track commission-based transactions and also help with security as there is an audit trail for all transactions, to see who did what or approved others, on the system. Interswitch systems are also able to flag suspicious electronic and mobile transactions and these all help to stem the fraud that plagues many smaller institutions that have not invested in technology solutions.

Interswitch enables institutions to process ATM transaction for customers of over one hundred financial institutions, enhancing the value of their invested ATM infrastructure . The systems will even work when there’s no internet connection, and for the customers of these institutions, Interswitch  enables phones to act as ATM cards so that their customers can transact at ATM’s without having to carry a plastic bank card in their wallets.

Interswitch in Kenya

Interswitch is a Nigeria-based, transaction switching and electronic payments processing company, with operations in several African countries. The company, founded in 2002, provides payment solutions for individuals and organizations, mainly around financial services to several private sector companies, as well as in the public sector (government revenue, health care etc.)

Interswitch was majority acquired by Helios Investment Partners for $96 million in 2011. Helios are best known in Kenya for their large investments in Equity Bank, Wananchi Online, and soon, at  Telkom Kenya, where they are in the process of buying out France’s Orange Telecom.

Interswitch itself entered Kenya by buying 85% of Paynet Holdings in 2014, which was best known for it’s Pesa Point network of ATM’s, which was launched in 2005,  and which grew to serve customers of over 100 institutions including several of the large and mid-size banks. At the time of the  Interswitch purchase in 2014, Paynet Services had 2013 revenue of Kshs. 320 million (~$3.7 million) and powered of 1,200 ATM’s and 1,300 bank agent locations in Kenya.

Interswitch also owns Verve International which is the largest card brand in Nigeria with almost 30 million customers. Interswitch launched the Verve card brand in Kenya last month, in a partnership with KCB, East Africa’s largest bank