April 2nd, 2020 - Payments
The Future is here now. Why you should be considering Nexo as your payments protocol
By Jon Cole, Director Product and Technical Solutions
The ISO 8583 payments protocol seems to have been around forever, in fact it has been since the late 1980s. It’s what I started my payments career using. It was intended to be the ‘Standard’ for payments, but as we know, there are a million and one different flavours out there based on the three different official versions (1987, 2003 and 2005). Everyone has their own unique interpretation of the 8583 specification. But it’s not going to go away anytime soon, as many payment applications are based on it and most of the traditional card scheme interfaces still use it.
However, Chief Technical Officers (CTOs) have noticed that programmers who know bitmap protocols such as ISO 8583, who cut their teeth writing COBOL programs, have either retired or are reaching retirement age.
Schools and universities no longer teach legacy business programming languages and techniques. Instead, the next generation of software developers want to be game and app developers, and work on projects perceived as more exciting and not ‘boring’ payment and business systems.
The next generation are being taught internet skills such as HTML and XML, Python and C# languages. Therefore, the resource pool for ‘old school’ programmers is shrinking, and their skills and expertise are dwindling.
The world economy is global and competitive, and large retailers and acquirers are looking to cut costs and simplify their cross-border payments and solutions. Older POS terminals are going out of PTS compliance in the next few years, so decisions on upgrading these need to be made soon and investments planned for.
This leads us to consider the following:
The future: Is Nexo an answer?
So faced with the above challenges, what can you do? This is where Nexo comes into play. It started in France in the mid-2000s with the EPASOrg, the OSCar consortium and the CIR SEPA-Fast technical working group under the guidance of Groupements des Cartes Bancaires. EPAS evolved to become Nexo, with the aim to be a true open and next generation global payments protocol.
Nexo’s aim is to simplify payments for retailers, processors, acquirers and terminal manufacturers. It does this by providing a standard framework for the four components:
As a cross border retailer or acquirer, you ideally want to standardise the card holder’s POS experience regardless of the region or language. You want to be able to purchase a generic terminal that will work out of the box, to be able to easily switch acquirers without having to develop new host protocols, and to not be dependent on a TMS that only works with the one manufacturer.
Nexo provides a solution to these problems. There’s a consistent cardholder experience at the POS across multiple countries. If you purchase a Nexo certified terminal it will work with any Nexo supporting PSP or acquirer. You will have greater choice in terms of terminal manufacturers, and you will not have to put all your eggs into one basket.
From a programming perspective your developers will understand the ISO 20022 XML protocol that Nexo uses. The pool of developers who can support it will be larger and it will easily integrate into your omni-channels and support modern requirements for QR and barcodes.
If you have implemented SWIFT payments, then you are already using ISO 20022. As Nexo is an open protocol you can also help shape its future by becoming a member.
Nexo is starting to be noticed and is being adopted in many regions outside of Europe. Now is the time to start considering your mid to long term payments roadmap. TNS can help you on your Nexo journey and ease your implementation plans.
For example, TNS can convert:
The future is Nexo. Now is the time to start planning for the future, be prepared and stay one step ahead of the competition. The investments will pay dividends and provide you with a flexible, future proof solution.