Development of a next-generation payment solution, which provides invoicing companies and online shops with an instant payment solution based on bank transfer.
With the European Union's Second Payment Services Directive (PSD2) going into effect, the opportunity has arisen to reform traditional payment solutions.
Thanks to the new regulation, third-party service providers (TPPs) can access banks' account management systems and the data stored in them (AISP) via banking APIs, and initiate payments (PISP) to other financial service providers. Through this TPP can provide new innovative financial services to retail and corporate customers.
For our banking clients, we have helped to create an innovative electronic payment platform, both from a business and development perspective, using these technologies.
A key part of designing a new payment solution is to make the payment process simple, smooth and easy to understand. Therefore, in the first phase of the project, we focused on exploring different payment solutions based on international cards, QR codes, payment requests, traditional bank transfers.
In order to provide "convenient payment" as a payment method, we needed to build connections to the banks' interfaces. The connection to these interfaces will be developed in a phased approach. Most of the banks use two major standards to meet PSD2 requirements, so in a first step we have built interfaces to the STET and Berlin Group standards, which will allow us to provide high coverage at relatively lower effort
PISP, API connections have been established to all major banks in Hungary. This means 11 institutions, which are Budapest Bank, CIB, Erste, Granit Bank, K&H, Magnet, MKB, OTP, Raiffeisen, Takarékbank, Unicredit. It takes nearly 8 weeks of work per bank to complete a connection. The critical tasks are to study the sandboxes (test systems) of each bank and to integrate the dependencies and functions of the different organizations into the FairPay systems.
In accordance with PSD2 rules, after building the API connections to the sandbox, we performed an external IT security audit. This was to prove that the system we developed is closed from an IT security perspective. The successful completion of this audit was a prerequisite for us to start building API connections to the live systems of the different banks.
In addition, the European PSD2 regulation requires the existence of various fraud monitoring mechanisms. Accordingly, we have built consumer protection logic into the system to reduce the possibility of abuse.
To initiate different types of online payments (PISP, QR, payment request), we have also created a product interface for individuals, available as a web application or an application for mobile phones (iOS, Android, Huawei). Through this interface, users can register, access their account information, their accounts and track their payment transactions. The system provides users with a PFM module with statistics, statements and charts based on spending patterns.
The key to the user interface is the screens themselves that enable the payment process. We distinguish between two separate payment processing screens, one where a FairPay user with a logged-in, saved bank account number initiates a process, and the other where a non-FairPay user initiates a payment process. The screens themselves differ depending on the payment path. In the next phase of the project, we have developed an interface for merchants and invoice issuers, which helps them to review payment transactions made through the system, and to access post-transaction charges and settlements. Taking into account market needs, we developed the sandbox system necessary to connect and build integrations. This environment, which is the same as the live system, provides interface to create and test API connections.
In the last phase of development, we created the FairPay administration system, which allows to record the details of the merchants to be connected, the contracts, and to track the steps and phases of the partners' connection process. We have also integrated customer service functions in the interface, where you can track each customer's transactions, settlements, or complaints.
As a result of the development, we were the first team to carry out PISP transactions in Hungary, and we also created a QR code application that will allow retailers with online cash registers to offer their customers an electronic payment option, which is legally required from the 1st of January, 2021.