Over the last 12-months, several high-profile FinTechs and challenger banks have experienced multiple outages for cards processing, leading to reputational damage, anxious tweets, irritated customers, and potentially, lost revenue.

Why does it keep happening?

Most FinTech money management companies and challenger banks issue debit cards for their customers to make payments.  When these debit cards are used, the card scheme routes them to the FinTech/Challengers’ “issuer processor”.  The issuer processor is a member of the scheme and is responsible to the scheme for the compliance of the cards processing services.  The processor then usually contacts the FinTech/Challenger system for authorisation. 

Because FinTech/Challengers tend to use core systems implemented using modern technologies and often deployed in public or private clouds, it’s difficult for them to connect to traditional cards processors which are embedded in legacy systems and protocols. These aren’t cloud deployed and rely on protocols like ISO8583 and hardware security modules (HSMS) for cryptography processing. 

FinTech/Challengers have tried to solve their technical integration issues by contracting with various new processors that promise modern connectivity methods to eliminate the integration issues, however, the required quality of service has not been there. 

What these organisations need to if they want their systems to perform without fail is to use a cloud-native processor interface switch that can be deployed into the cloud, seamlessly connecting all the necessary mechanisms and components within the Fintech eco-system.

Switches need to be designed to suit the demands of 21st-century FinTechs like Monzo, Loot, Curve, and Revolut, and provide - for example - traditional ISO8583 connectivity with HSMS while supplying JSON-based integration into modern core systems.

Innovative businesses cannot rely on static solutions as part of their delivery model. Real innovation needs to be holistic in its approach, side-stepping legacy issues, and embracing modern solutions that are fit for purpose – rather than legacy products that are thought to be just about ‘good enough’ – because mostly, it looks as though they aren’t.