OMA Emirates is a vendor operating across Africa and Middle East that provides cost effective payment solutions for banking, retailers, telecom service providers, insurance, government, oil and gas companies. It also provides card issuance solutions typically leveraged for debit and credit cards, consumer loyalty cards, and other services based industries.
When OMA Emirates entered the regional Middle East market almost five years ago, after being initially focused on UAE, the objective was to provide a solution that was cost effective and technologically ahead of its competitors. Banks in the Middle East were expanding their services for consumers and required solutions that were cost effective to manage debit, credit and loyalty payment cards, as well as to consolidate payments made by these cards through customer driven channels. Another wish list from the target market was for these solutions to be made available in reasonable periods of time.
When entering this market, there was uncertainty for OMA Emirates whether the solutions being developed would be niche and therefore too small to be sustainable. At that time, such solutions were still on the drawing board for many of its competitors. Another requirement was that the solutions had to be EMV certified and compatible. OMA Emirates selected the Java platform, developed the solution and launched it and met with prompt acceptance by banks across the Middle East.
“We can now produce a card, issue a card and can acquire a card. Today we are basically a spine of any bank who wants to get into the business of cards. We have launched all the products for different banks around the region. Our core competency has been issuance and acquiring at all points of time, reflects Niranj Sangal, Group CEO, OMA Emirates Group, on the significant progress made by the business. Card issuance solutions developed by OMA Emirates such as Central Issuance Solutions and Branch Issuance Solutions are now being used by a large number of Middle East banks and integrate well with other Card Management Solutions as well.
The entry into the market with a product that was priced significantly lower than incumbents, that was technologically robust and ahead of its time, for which competitors did not have an immediate alternative, has helped OMA Emirates gain a leading 65% share of all cards issued in the Middle East
While OMA Emirates entered the market with its range of issuance products it soon moved to the acquiring side of products. These two areas have remained its core offerings across the years while it has added to spinoffs and value additions around these core areas. As an example, by selecting the right technology for its Switch offering it has been able to enter the ATM solutions market.
With the arrival of cloud and mobile technologies, OMA Emirates also provides the option of using virtual cards in addition to physical cards that are securely embedded inside a mobile device for example, and linked to multiple wallets including the E-wallet solution from OMA Emirates. Since OMA Emirates provides both issuance and payment solutions, its customers now have the choice of using its issuance products to manage virtual and physical cards and when their customers are making payments to provide them the choice of using any option of payment and acquirer channels.
“That is where we have evolved. We do not want to be the ones driving our products to ensure people use it. We want them to use whatever product they are comfortable with. We do not want to give a service to render payments, but we want to give a channel where customers can make payments through our platform,” elaborates Sangal. A partial list of banks that are using OMA Emirates issuance, acquiring, and personalisation solutions include, Al Hilal Bank, Bank Sohar, Bank Muscat, Oman Alizz Islamic, National Bank of Oman, Sharjah Islamic Bank, amongst others.
While the core competence of OMA Emirates has been its payment and issuance products, the complete solution does include the Card Management System. “This is the heart of the whole system without which nothing can function,” stresses Sangal. Any business wanting to get into issuing payment cards of any type needs to invest in a Card Management System. Once this is stabilised, the types of products and schemes are added on and the payment channels and secure gateways are linked up. “Ultimately the Card Management System and the Switching system become the core of any bank. Without this they cannot function.”
In order to expands its market opportunity outside banking, OMA Emirates has focused on demand drivers within select segments including insurance, government, retail, telecom, oil and gas. Using its core product offerings of issuance and acquiring, it has customised its solutions for these segments and integrated various channels based on customer use cases. “That was a key focus where we felt with what is happening in today’s world you need to derive solutions for a particular industry. The core product remains the same, but we can customise the product with any channels. All we had to do was build packages for them and say this is the product.”
Examples of such market specialisation within the product portfolio includes OMA Petrol Solutions, OMA Retail Suite, Loyalty Application, Health Card Solution, Gift Card and e-Purse Solution, E-Insurance Solution. Non-banking customers added through these segments include Qatar Insurance Company, Ski Data, Credi Max.
Sangal also cites the example of African telecom service providers and fintech companies who are opening up the market for mobile wallets and mobile payments. In the past African telecom service providers were restricting mobile money to airtime credit value transactions. Now users can make payments for multiple types of services from their mobiles without using only their airtime credit by connecting to other wallets.
“For us earlier it used to be a telco driving it. Now that is not the case and it is value added service providers which are doing it. Africa has been moving towards a lot of value added service providers. They are opening channels for people to use it as a platform and not restrict it to a telecom service provider. Telcos have becomes just one more channel.” This digital disruption is giving African telecom service providers the choice of moving into the bigger payment solution space or of taking the role of enabling their consumers to make payments.
Amongst the listed OMA Emirates customer profiles are telecos, Etisalat, du, Nawras, Mobily, Sabafon, Batelco.
As a payment solutions vendor OMA Emirates often needs to work with other vendors to build integrated platforms. A key aspect of working with products and solutions from other vendors is to establish the price point and its technology robustness. OMA Emirates will simulate the working conditions and stress test the product before classifying the vendor’s product along with its products. The other requirement is to match their end customer requirements and budget with the positioning of the vendor product to avoid a mismatch. “We would not suggest to a smaller bank a higher end product. If they do not need a higher end product why suggest it to them,” Sangal questions.
At present OMA Emirates has multiple vendor alliances with Ingenico for POS terminals, CIM for card personalisation machines, Cryptomathic for security solutions, Matica Technologies, Thales, Ergonomic Solutions, and NBS Technologies.
During engagement with an end customer, OMA Emirates gets asked typical qualification questions. Is the product security certified and what is the timeline for implementation? However more importantly over the last two years is the recurring question of leased ownership and payment modes.
Depending on the business size of the end customer, OMA Emirates does offer a build, operate and transfer model of ownership. This favours smaller banking entities who do not need to present large capital funds upfront to invest in Card Management Systems, Switch, issuance, acquiring and card personalisation solutions, to get started. This has opened up the opportunity market for OMA Emirates and Sangal estimates that the incremental turnover is around five such exclusive projects annually.
On a higher maturity of services level, OMA Emirates has started providing the entire end to end solution as a managed service. He explains, “Because we had the Switch, the issuance platform, and the acquiring platform, we said let us get into a model of managed services.” Along with its BOT offer for smaller banks and its managed services offering to help potential customers cope with faster go to market and growing technological complexity, OMA Emirates now sees significant expansion in its market opportunities.
- All we had to do was build packages for them and say this is the product
- Any business wanting to get into issuing payment cards of any type needs to invest in a Card Management System
- Because we had Switch, issuance platform, acquiring platform, we said let us get into managed services
- Our core competency has been issuance and acquiring at all points of time
- The core product remains the same but we can customise the product with any channels
- Ultimately the Card Management System and the Switching system become the core of any bank
- We are basically a spine of any bank who wants to get into business of cards
- We can now produce a card, issue a card and can acquire a card
- We have launched all the products for different banks around the region
- We want to give a channel where customers can make payments through our platform
- With what is happening in today’s world you need to derive solutions for a particular industry
Having established itself in the Middle East, OMA Emirates has been expanding its activities in North Africa through its investment in Morocco based Business Rules Solutions. Business Rules Solutions has significant expertise in developing acquirer solutions including its suite of Easy ATM Monitoring and EasyReconcile. It has also previously developed a mosque management system called Emam that is used to manage 45,000 mosques in Morocco.
For Sangal, there were two ways to enter the North African market. One was the traditional way of reinventing the wheel and building the venture block by block. The other way was to identify and invest in a suitable technology company with a strong competence of products and good understanding of the payment world. Sangal chose the second way and after test marketing a jointly built product decided to invest in Business Rules Solutions and jointly take it to the next level. “North Africa, especially Morocco has a lot of competent people on the payment side, and that is a domain we always look at. We have been getting a lot of inquiries from Africa.”
During the early part of their engagement, Business Rules Solutions and OMA Emirates jointly developed a new platform switch in less than one year, that has been certified for global payment systems. Prior to the OMA Emirates engagement, Business Rules Solutions provided payment solutions in North and West Africa.
Explains El Habib Alouah, Managing Director North Africa, Business Rules Solutions-OMA Emirates Group, “We have products that complement the core switch like Easy Reconciliation, Easy ATM Monitoring. For OMA Emirates, they found a software provider that was professional, that developed in good time and also in good quality, the core switch and switch platform, which is the basis for all OMA Emirates products.” On the flip side, Habib Alouah is expecting OMA Emirates to help sell its solutions into Middle East markets.
Over the longer term, Sangal expects to build new industry products with Habib Alouah’s team based in Morocco and believes the two businesses have a good fit. For OMA Emirates, Business Rules Solutions is now its extension into French speaking African countries. Having established the partnership agreement, Business Rules Solutions-OMA Emirates Group now handles inquiries and opportunities coming out of this market that were previously directed to OMA Emirates. This saves considerably for OMA Emirates on the cost of following up the inquiries and the complexity of preparing French and Arabic language proposals and documentation.
While entering, Africa is part of OMA Emirates controlled expansion spree, Sangal is aware of the vast differences between the two payment markets. In Africa, cash is king but the same does not hold true in Middle East. As an example, in UAE there are 40 million cards issued against a population of 9 million approximately. OMA Emirates has a market share of 23% of credit cards issued, which is growing at close to 5% annually. The growth in card transactions across the Middle East is growing at 9% annually.
All this contrasts with Africa, where there is a much more conservative outlook towards card based transactions. “In North Africa transactions, do move but at the end of the day cash is the biggest thing that works. I would not use a card if not required and still prefer to use cash. Usage of cards is not a preferred mode of payment while cash is. The market is very developed, but as Africa people love to be more conservative and they use money than using card. It is the trust that makes a difference here,” elaborates Sangal.
Habib Alouah from Business Rules Solutions-OMA Emirates Group adds, the demand driver for transactions in North Africa is cash withdrawal from ATM branches. Issuance and usage of debit cards exceeds credit cards and prepaid and mobile payments are highly requested. This is quite different from Middle East market requirements.
With the Business Rules Solutions partnership established, will Sangal now take OMA Emirates into Rest of Africa? The answer is not so straight forward.
“For us it can be done by a mass run in all countries. I mean, to have 100 channel partners will take me three months to build as many channel partners as I want. But what is the end result? I would sell a product but never be able to maintain it.” That is an outcome Sangal wants to avoid. OMA Emirates expansion into Rest of Africa is based on replicating the successful Business Rules Solutions role model established in North Africa. For Sangal, it is imperative that localised product quality, skills, services, are extended further along with their expansion into Africa. Leveraging a pure play channel partner model is not the way OMA Emirates wants to expand into Africa.
However, OMA Emirates does also work with value added resellers in Central and South Africa under certain conditions. Depending on the competency of the value-added reseller, either it is a direct sell by OMA Emirates with a margin for the partner or tripartite agreement with local support by the reseller. In either case OMA Emirates takes a lead role in the engagement till the end.
“We always sign a third-party agreement with us directly in case the partner does back out. Picking the right guy is very important so we work in understanding what those companies do. We do not just work with any partner that wants to resell our product, because it is more on the payment industry side.”
A significant variation of the vendor channel-partner commodity model practiced by so many, but more than likely to ensure steady expansion of OMA Emirates into the African continent.
Key takeaways, Africa
- Africa has been moving towards a lot of value added service providers.
- African people love to be more conservative and they use money than using card
- But what is the end result? I would sell a product but never be able to maintain it
- For us it can be done by a mass run in all countries
- I would not use a card if not required and still prefer to use cash
- In North Africa transactions do move but at the end of day cash is biggest thing that works
- North Africa especially Morocco has a lot of competent people on the payment side
- Picking the right guy is very important so we work in understanding what those companies do
- Telcos have become just one more channel
- The market is very developed
- To have 100 channel partners will take me three months to build as many channel partners as I want
- Usage of cards is not a preferred mode of payment while cash is
- We always sign a third-party agreement with us directly in case the partner does back out
- We do not just work with any partner that wants to resell our product
- We have been getting a lot of inquiries from Africa
- We have products that complement the core switch like Easy Reconciliation, Easy ATM Monitoring
- We would not suggest to a smaller bank a higher end product
EMV Authorisation Host
This determines whether a transaction is accepted, rejected or referred to a card authorisation entity by card issuers. The approval process is based on account number validation in combination with an expiration date or authorisation schemes such as hot card to ensure the cardholder’s account is activated and that the card has passed various security checks.
It is activated when sales transactions are made on POS devices. The system can be configured to a variety of interfaces, ATM terminals, POS devices, host systems, credit card networks and switch networks using customised authorisation settings to determine the relevant authorisation issuer. It monitors card usage by product type, volume, time, location and usage limits if applicable.
When in stand-in mode, the host authorises transactions on behalf of temporarily unavailable issuing associations by reviewing the preloaded cardholder file, hot card list provided by a web-based interface, determining any specified limitations and performing transaction data checks, to approve or decline the transaction based on preset specifications from acquiring customers.
The system also sends batch-posting files regularly for reference even when temporarily offline and provides users with a web-based interface to monitor all transactions, denied authorisations, approval association responses, hot card and limitation details as well as providing users with analytical and exceptional reports.
The user-friendly interface allows users to configure the system and create multiple accounts with customisable access rights. The system also provides a secondary backup host and disk mirroring for database backup to minimise downtime and associated consequences.
The host supports TCP/IP and X.25 for low level data communication protocols and VISA, MasterCard, JCB, American Express, and Diners for authorisation communication.
Card personalisation solutions that comply with strict EMV security and design standards are ensured by host security module. The software contains magnetic strip encoding and chip encoding as well as contact, contactless encoding. Online operations are done for each card to be personalised through a HSM to enhance key management operation.
The Smart Factory then checks the electrical personalisation validity, chip content and consistency of the magnetic strip data and chip and finally, the Smart Factory QC uses real life situation simulations to assess card behavior against expected responses.
Information gathered from a number of locations is collected at a central point and all cards are personalised and prepared for distribution to cardholders. Complying with EMV security standards, high-level security is ensured through encryption using key management schemes Master, Session, DUKPT and RTKS.
Imported data from the card management system is provided with the necessary cryptography using Gemalto SafeNet hardware security modules. This in turn eliminates the threats of theft and fraud for banks and users and allows banks to focus on other business operations.
Banks can take full control of the issuance through in-house personalisation supporting multiple databases and allowing data retrieval, image capture, card issuance and reporting facilities. The solution supports issuance of Java, Multos and native cards as well as customisable import processes and interacts directly with CIM machines.
The branch issuance solution enables EMV compliant smart card issuance instantly from bank branches following successful registration as well as instant replacement of lost or stolen cards in less than one minute. The ability to issue cards instantly in a branch allows faster activation rates and greatly reduces time and costs involved when mailing cards through central issuance as well as ensures only the authorised recipient of the card receives the package.
Since the card is instantly activated, customers can instantly choose a pin code of their choice and can then instantly use the card for their purchases.
OMA secure pin pad can be used to allow card holders to enter their pin or alternatively an IVR can be used. Being EMV compliant also means that high security levels are ensured through encryption using key management schemes and EMV data remains in the central server accessed only by authorised staff.
Card Management System
Most financial institutions are aware that consumers are becoming educated and willing to compromise brand loyalty for better services. This CMS is EMV certified system and manages issuing and acquiring functions for private and international banking cards including card and merchant functionalities, payment authorisation and account clearing and settlement. All approved authorisations can be controlled and monitored with the CMS and instant transaction reports can be generated demonstrating statistics for all transaction activity.
In addition to this, the system also performs clearing and settlement reports for transactions with other financial institutions. The CMS supports all card technologies including magnetic strips, smart chip cards, as well as all types of cards such as credit, debit, loyalty, EMV, and can incorporate loyalty and incentive programmes. The CMS operates in a multi-institutional environment with customisable business processing procedures and is capable of functioning in various languages and with multiple currencies at a cross-border issuing and acquiring level.
Managed Services for banks will help capitalise on existing infrastructure business know-how and hands-on experience. OMA Managed Services will cover leasing of terminal and POS services, POS network services, ATMs, remote IT Infrastructure and payment solutions.
To suite the business demands of banks, OMA Managed Services will also cover POS support services for banks and financial institutions. This service shall cover support services for the new POS terminals supplied or existing POS base, peripherals and supplies and shall not only be cost beneficial but will also adhere and support all payment card industry compliance standards. With ATM services, OMA Managed Services is capable of providing essential ATM network management for banks to provide services to their customers. The fully compliant ATM services are provided using tried and tested software and mandated international standards.
This is a secure online solution for ATM transactions to optimise the management of ATM activity providing transaction routing, authorisation hosts, settlement and management reports. The solution complies with strict EMV standards and is certified by major payment labels. The monitoring system of NanoSwitch ATM allows for in depth supervision of ATMs providing clients with detailed information on ATM activities at any given moment, the number of ATMs in services, number of ATMs out of order, number of ATMs without connection and more.
A measurement system generates analyses of each ATM performance using stored data and offers both standard and customised reporting capabilities which can be utilised at any time. NanoSwitch ATM can be configured to multiple banks, many languages, and deals with numerous currencies and offers users a wide variety of services as follows.