At Infosys Cards and Payments, we help our clients harness the power of technology-led innovation across the entire payments ecosystem encompassing payment networks, merchant services, stored value, FI payment services, and payment aggregators. Our thought leadership and a design thinking approach helps us co-create solutions with our clients to address their business problems.

October 2, 2016

Augmented reality, gamification and new voice interfaces transforming tomorrow's commerce

In my previous post, I discussed how carefully orchestrated use for emotions and senses can improve purchasing and payment experience increasing the likelihood of spend. This post is a continuation of the same theme providing more details on how payments and advertising are getting transformed with new emotional interfaces, gamification, and augmented reality technologies.

Pokémon GO, the revolutionary augmented reality game, is changing the way small businesses do marketing. In this inherently, social game players need to walk around and catch creatures with the smartphones. Local eateries and small businesses are using this opportunity to increase traffic through various Pokemon Go Marketing techniques (Pokemon Lure Modules, Pokemon Gyms, Pokemon Paid Sponsorships etc.).

Although Google Glass did not get expected success, Snap Inc. (formerly Snapchat Inc.) is introducing a new wearable 'toy' called Spectacles which can capture 10 or 30-second videos and share with Snapchat friends. This makes absolute sense as opening an app from user's smartphone can take quite some time and for unplanned circumstances, the user may miss capturing the moment. There is also a plan to use Spectacles for context sensitive advertising as evident from their Patent application.


The other big opportunity is Artificial Intelligence (AI) driven Voice Interfaces like Apple's Siri or Amazon's Alexa powered Echo. These Intelligent Agents do things for you, understand what we say in proper context and continually learn to improve response accuracy. This will introduce Voice Commerce replacing today's advertising and Voice Payments becoming the foundation for Voice commerce. It will be quite a revolution! 

August 2, 2016

How to process Investment in Associates in Oracle E-Business Suite?


When an investor entity exerts significant influence over an investee entity, the latter is called an 'associate' of the former. When the investor has the right to take part in the financial and operating policy decisions of the investee, it is treated as a 'significant influence.' However, the term 'significant influence' does not include 'controlling influence,' in which case, the investee would be called a 'subsidiary' of the investor entity. The investor may acquire this 'significant influence' by holding a 20-50 percent stake in the equity capital of the investee, or through terms and conditions of its investment that provide the entity such rights.

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June 1, 2016

Redefining loyalty points to save, not spend

 After a year of employment, I became an excited owner of my first credit card. The fact that it did not mandate instant re-payment, and instead provided the flexibility to re-pay after a certain duration depending upon the billing cycle and grace period, took-on a new approach to my purchasing approach! What intrigued me most was the concept of loyalty points, also referred to commonly as reward points, which the card company provided to all its card members for making purchases. And it worked quite well to encourage customer loyalty towards the card brand.

Continue reading "Redefining loyalty points to save, not spend" »

April 23, 2016

Human senses and emotions - Design considerations for Payments Business

In this TED Talk Jinsop Lee suggests how design using multiple human senses (sight, touch, smell, sound and taste) can significantly improve the experience (I strongly suggest you take time to see the talk). Instead of just focusing on sight and touch, addition of a new dimension such as smell can significantly improve the interaction experience. If you have experienced shows in Universal Studios etc. you are probably getting what I mean (light, touch, smell and sound all creating a magical reality together). Beyond the senses use of human emotions (sad, angry, scared, tender, excited, happy) also play a significant role in experience design. Think of a couple enjoying their honeymoon in an exotic island resort - combination of their emotion (tender) and restaurant design with great touch, sight, sound, taste and smell(all five senses) can make the evening a once in a lifetime experience. Great hotels make money by designing these unique experiences for which customers are always ready to pay premium.


Payments is a universal value exchange process between customer and business. Customized design of this process using the principle of senses and emotions can significantly improve customer satisfaction, loyalty and advocacy. For example when a customer is sad and scared(e.g. some close relative is struggling with cancer and customer is paying urgent hospital bills for an operation) the payments experience should sympathize with the customer (e.g. offering some installment plans, additional comments of encouragement printed on the receipts etc. should be considered). But when a group of college students are paying for a weekend party (happy  and excited) pricing and payments experience should be designed differently - we can consider use of wearables(experimenting with the trendy way of paying), use of exciting colors in the Point of Sale (red/yellow), use of exciting background music(sound) etc. to improve the payments experience and increase the likelihood of spend. Gamification is another opportunity to exploit human emotions - especially in a group setting customers pay more when you mix gamification(and dynamic pricing) with loyalty strategy. 

Companies are recognizing these trends and 'senses and emotions' based product design is getting significant traction with the advent of new technologies like Mobility, Predictive Analytics and Internet of Things (IoT) etc. Payment players such as American Express, Visa, MasterCard and Bank of America are investing heavily in wearable wallets, biometrics, and Internet of Things (IoT) technologies to make payments invisible. We are seeing new partnerships of payment players with device players such as Ringly, Nymi, Jawbone, GM (key fob), TrackR, and more. We are seeing trendy ways of payment authentication such as pay-by selfie facial authentication by MasterCard. All these innovations are subtle use of human senses and emotions to improve payments experience. We believe these trends will continue and amplify in coming days.

October 28, 2015

Math based currencies - Fool's gold or future of transactions?

This week I read a bullish viewpoint on Bitcoins (alternate link) from the famous Winklevoss twins who have started a licensed and regulated bitcoin exchange company Gemini. They own significant amount of bitcoins and think this value exchange over internet will have profound impact on our lives in the long term. This interview has some interesting viewpoints - why expanding credit card/ACH networks is costly and hence not best solution for international trade, why Bitcoin is better than gold (what happens if asteroid mining becomes successful) etc. They think the only significant problem with Bitcoin adoption is regulation and hence they are trying to address it with a regulated exchange. There are other problems with Bitcoins as well - one of them being the energy inefficiency of the Bitcoin transactions. Some think in present format Bitcoin is not ready to replace the fiat economy due to its extreme energy inefficiency compared to other existing protocols (here is an Economist's version comparing gold standard or money movement). 

Napster failed to be a financially successful music distribution company (probably it was early for its time) but it opened up a Pandora's Box for innovation in this space (some successful cases would be Apple iTunes and Spotify). We may see similar history repeating in Virtual currency & Distributed Ledger space. We are still early to assess the future -these new technologies may compete and win against incumbent players or incumbent players may adopt them and make them mainstream. But one thing is certain - these disruptions will improve the efficiency of financial market, increase trust and open up new business opportunities.

September 15, 2015

Adhering to Dodd Frank Act Supervisory Stress Testing

Post financial crisis US government has enacted an act 'Dodd-Frank wall street reform and consumer protection act. As per this act US bank holding companies with 50$ billion or more in consolidated assets, to conduct an annual stress test. Federal Reserve calculated its projections of a BHC's balance sheet, risk-weighted assets (RWAs), net income, and  resulting regulatory capital ratios under these scenarios using data provided by the BHCs and a set of models developed or selected by the Federal Reserve.

These projections have to be done for nine quarters planning horizon based on three macro economic scenarios (baseline/adverse/severely adverse). It requires banks to calculate

1. PPNR from net interest income, non interest income and non interest expenses
2. Pre-tax net income from PPNR, Revenues, Provisions and Allowance for loan loss
3. After tax income from pre-tax net income and taxes
4. change in equity capital
5. change in regulatory capital

FED projects revenue, expenses and various types of losses and provisions that flow into pre-tax net income based on data provided by Bank Holding Companies with models developed by FED and validated by economists from FED. Banks also have to run their own stress tests with common stress scenarios and assumptions used by FED to help gauge the potential effect of stressful conditions  on the ability of banking institutions to absorb losses while continue to act as credit intermediaries.

BHC's need to compare results of stress tests with scenarios of varying magnitude to improve decision making. Oracle financial services analytical application provides Stress testing as packaged analytical application to achieve all below.

1. Compare results of stress testing across multiple stress scenarios
2. FR Y-14 reporting with projections of PPNR, OTTI, Fair values under different scenarios (FR-Y14 Monthly/Quarterly/Annually)
3. Reporting of OCC DFAST 10-50B results schedule

With all these capabilities OFSAA Stress testing analytics will be an effective enterprise solution to accomplish dynamic regulatory requirements and provides forward looking quantitative evaluation of impacts of stressful economic conditions on BHC capital and capital decision making by management.

OFSAA Analytical application will also enable Bank holding companies to pull out regulatory reports of all magnitude scenarios, quickly respond to emergency business situations and also to cater to evolving regulatory requirements and reporting templates that may get introduced by regulatory bodies.

September 10, 2015

Implementation challenges of CECL Methodology (Current Expected Credit Loss) & leveraging OFSAA LLFP Analytical Solution

In 2012 Financial account standards board (FASB) issued a proposed accounting standard update that proposes that banks and other financial institutions modify recognition of impairment from an "incurred loss" or "probable loss" basis to a "lifetime of loss" estimate. Global financial institutions need to set aside loan impairment reserve for duration of the exposure as opposed to reserving for ''probable losses''. This proposal require banks to calculate loan reserves future loss estimates based on past events, current conditions and reasonable forecasts about the future.

Under this new proposal, though there is no need to determine loan reserve at the loan level it is very important for banks to maintain granular detail throughout the life of the loan. In addition to considering loan attributes, borrower attributes historical loss experience of loan with similar characteristics also need to be considered. Effect of current economic environment as well as projected economic environment arised over the life of the loan.

While implementation of an expected credit loss model require significant work of banks & financial institutions, following are potential challenges to be considered.
a. Complex vintage analysis
b. Data requirements specific to life of loan calculation (LOL)
c. Discounted cash flow analysis
d. Forecastable features(like future drawdowns, delinquency, discount rates, prepayment).

Incorporating CECL method will have significant impact on how banks/financial institutions set aside reserves for future credit losses on impaired assets. In order to address many of these implementation challenges of CECL model Oracle financial services provides packaged solution, OFSAA LLFP which can be leveraged by global banks. LLFP solution provides capability like historical transition matrix , Cohort method for vintage analysis and discounted cash flow methodologies to address these challenges.

July 20, 2015

Retail Payments Systems are becoming Faster - How Payment Organizations can be future-ready

Real-time Retail Payment Systems or Faster Mass Payments Schemes are gaining popularity across the globe. More than 20 countries have adopted or soon planning to adopt this type of Payments scheme (including some big markets such as UK, Singapore, Australia, US & Canada). Adoption of Faster Payments is natural to today's real-time commerce needs - Faster Payments help grow GDP at faster pace due to increased velocity of money (improved liquidity and credit effectiveness). Typical use cases for Faster Payments are Person-to-Person (sending money to a friend in emergency), business-to-business (just in time supplier payments), person-to-business (time sensitive bill-payments) and business-to-person (temporary worker payroll) payments.

Some of the characteristics of Faster Payments Systems are:

• Speed and Finality - Real-time access to Good Funds - no future revocation
• Availability and Timely Notification - Should be available 24X7X365. Payment Status readily available
• Ubiquity - These are Domestic Push Payments/Credit Transfers which should be available for all stakeholders
• Overlay Services - Value-added Services on top of Payments Platform (optional but highly recommended)
• Simpler Addressing Alternate addressing with mobile number or email id (e.g. Paym in UK)
• Interoperability & Open Standards e.g. use of ISO 20022 - Most new Faster Mass Payments schemes are using ISO 20022 standards


Operational Challenges of Faster Payments:

• Fraud Management and compliance in a real-time environment
• Managing counterparty risk if settlement is not done real-time
• Keeping systems and support processes available 24X7X365
• Handling Payments mix transition from 'slow schemes' to 'fast schemes' including infrastructure and customer support


Best Practices for Transition:

• To control Fraud try multi-factor authentication and train support stuff
• Prudent Exception handling & SLA management processes should be in place
• Plan for swing in capacity - may try Adaptive architectures
• Right pricing of services - may demand premium pricing but that should be balanced against demand drop

Transformation Roadmap:

• Manage the Transformation with a Centralized Program Management Office and Architecture Board for roadmap alignment, resource optimization, governance and control
• Build Platform for Capacity growth and 24X7 availability(very high initial growth is historically expected as transactions from slow payments systems move to faster payments schemes)
• Extensive end-to-end testing is required - plan for automation and reuse from early on
• Plan to explore latent demand and monetize new innovative value-added overlay services - plan to explore opportunities of ISO20022
• Plan for changes in future - Plan for multi-provider environment in large markets (e.g. US), Cross-border Faster Payments (multi-currency) and no upper limit schemes

July 17, 2015

Can distributed ledger technology and public review of transactions help improve the performance of government policy and resource allocations?

I read a fantastic BloombergView article today morning which shows governments across the world manage an estimated $75 trillion worth of commercial assets -- roughly 50 percent more than the $54 trillion in global public debt -- and these assets are typically quite poorly managed. In some cases, governments have actively tried to hide their value, often so that government officials can personally benefit from handing out favors. The study suggests a 2 percent-point increase can fetch additional $1.5 trillion - equivalent to global spending on research and development. If we consider the developing or poor countries the scenario is far grave. Lot of countries are managed by criminal politicians who use most of foreign aid or tax revenues to fund their own personal assets (using cash for money laundering to Tax heavens, Terrorist financing, luxury apartments etc.) when most of their citizens live a poor, hopeless life. There are misallocation of public resources even in advanced countries - citizens are not always aware of all the transactions, lobbying efforts by rich companies exploit tax loopholes or gain undue competitive advantage in terms of government subsidies etc. The centralized ledger system followed by central bodies today is built on trust of the government - many think this helps powerful bankers manipulate the global financial system and add undue systemic risks. The payment transactions of today does not have built-in traceability- there is no way to trace how the cash changed hands and moved from NYC to Washington and back!


The latest breakthrough in blockchain or distributed ledger technologies has power to disrupt this nexus. The historical trace capability of distributed ledger and public analysis of the transactions can potentially reduce money laundering. This can increase the trust of common people in the financial system and improve global commerce. If use of cash is banned over time and use of distributed ledger technologies get enough traction we many see a much efficient and corruption free world in future. We can dream of a world where government performances can be validated by the effectiveness of the public money they manage (we have seen the use of Sovereign Fund or TARP ETF) and crowdsourcing best ideas for use of public money becomes the norm. It will take time but we probably will see it in our lifetime.

May 21, 2015

New Loyal = Comparison shopping + Passive Payments

Digital Consumers are increasingly becoming less loyal. Traditional Loyalty models are failing - comparison shopping is becoming a must for them to get the best deal. They are first searching a product in leading ecommerce sites - browser add-ons like invisiblehand are helping them to find the best price in other sites. Once found they are shopping from the cheapest sites using their mobiles-possibly while travelling back home. They hate typing (name, address, card number details) in small mobile screens - so they prefer 'one-click checkout' type passive payments options. They are always under time pressure - so they feel happy if someone can virtually guide through the whole shopping process(finding right store or coupon etc.) - as if it were a private shopping experience(of course without paying any additional fee for the premium experience).consumerism.jpg

Banks & Card Companies have tried their own shopping sites with special offers for card members. Most of these sites are membership based - you can only get those offers if you have the card. They can improve these shopping sites for digital consumers and get loyal business (merchant discounts/interchange) from these comparison shoppers by helping them to play their own game. Here are some winning steps -

1. Build a Membership-only site (must be mobile-friendly) which can be accessed by only cardholders - preferably use single-sign-on from online banking site.
2. This member only site should allow cardholders to search for any product or service e.g. camera, travel booking etc.
3. Now when the consumer searches for an air booking the comparison shopping engine (similar to invisiblehand) should display the lowest price options for same itinerary from various partner sites (it should consider all charges, taxes, coupon codes make it the best deal for the consumer).
4. Finally when the customer is ready to pay - the checkout or single sign on feature should identify the right card from the profile, apply the best coupon and make the checkout process as frictionless as possible.

If executed properly this can help banks or card players win significant customer trust, loyalty and sticky profits. The key success factors will be to continuously fine-tune the comparison shopping engine(comparison shoppers will start trusting you when they will feel you are doing a better job than themselves and thus saving time and money), create a frictionless checkout experience through responsive web-design, build partnerships and communicate the value to customer in right way.