CPS system a boon to banks

The National Payment Council (NPC) together with the Central Bank of Sri Lanka (CBSL) and LankaClear (LCPL) will launch a Common Payment Switch (CPS) to enable Online, Real-time, Secure and Reliable fund transfers for low value interbank payments, said Chairman, Lanka Clear Sarath de Silva.

The national system will have multiple multilateral Net Settlements during a day. The Net Settlement will be via the Banks’ Current Accounts maintained at CBSL.

The Common Payment Switch initiative has already begun and the pilot run will commence in February 2009. We expect to see all banks fully integrated to the CPS during 2009 thus ushering a new era in the payment and settlement sphere, not only in Sri Lanka, but also in the region as well.

He said the CPS system will greatly help banks in the areas of Higher operational efficiencies, Greater revenue generating capabilities and cost savings and Hi-Tech capabilities.

Banks will benefit tremendously by lowering its operational overheads by almost eliminating the manual work and errors induced due to most processes being manual in the current operations. CPS will help banks to create new products and thus significantly increase the “Top Line”, and the margins.

With the CPS system, banks can easily take advantage of creating an efficient salary payments system that has a potential market of 4.5 million transactions a month, apart from third party payments, bill payments, direct debits, card based POS payments, local credit cards, inward remittances and statutory payments.

Banks will save on cost associated with counter-times (i.e. a physical visit of a customer) and also by redirecting employees involved in manual work towards other income generating activities.

Since CPS is an online real-time system, banks will have 24x7 access to standard or customised reports and transactions status.

Also, it will integrate seamlessly to the existing banking systems, while making each transaction more secure and reliable. Essentially banks will get a future proofed online, real-time payment system for a very low Total Cost of Ownership (TCO).

Some of the main advantages that customers will enjoy include faster realisation of interbank payments via secure transactions that has multiple access points (i.e. ATMs, Internet banking and Mobile banking) and 24x7 access to banking services.

With the introduction of the online, real-time payment system where the payment is realised instantaneously there will be heavy usage given its ease of use and the high security of each transaction.

One of the main benefits will be Higher liquidity in the payment and settlement system of the country, induce rapid economic activity and growth. This will assist the country to realise its goal of being a regional economic hub.

The CPS framework will create the infrastructure required for a payment super highway in the country to enable future development in the banking sector, such as eCheques, integration of payment modes such as mobile cash, card integrated POS systems and ATMs. SG