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options to acHieVe a2a interoperiBility
the idea of a single neutral switch may initially seem to be a good approach for connectivity to banking networks, as it reduces the
number of connections needed, but, by contrast, if there are a low number of mmos, it may be overly expensive and time consuming for
mmo interconnectivity.
the settlement model between participants would require two stages: settlement between one participant and the processor; and set-
tlement between the processor and the corresponding participant. typically mmo payments are real-time transactions using e-money
that is matched by cleared funds in a trust account at a bank. this may not be the case for all transactions through the processor, thus
this introduces settlement risk that requires consideration in the technical solution and operational service. this new, two stage model for
settlement may delay deployment and may lead to additional risks.
the definition and control of the operational rules, transaction processing and settlement requires the active involvement of all partici-
pants in the neutral switch. in relatively new markets and markets that have mmo schemes with significantly different levels of maturity,
ensuring that the operation of the joint venture gives an equal and non-exclusive, ‘level playing field’ to all participants will be essential.
this will require oversight, the body for which may be difficult to identify and potentially costly to engage.
13
the idea of a single neutral switch may initially seem to be a good approach for connectivity to banking networks, as it reduces the
number of connections needed, but, by contrast, if there are a low number of mmos, it may be overly expensive and time consuming for
mmo interconnectivity.
the settlement model between participants would require two stages: settlement between one participant and the processor; and set-
tlement between the processor and the corresponding participant. typically mmo payments are real-time transactions using e-money
that is matched by cleared funds in a trust account at a bank. this may not be the case for all transactions through the processor, thus
this introduces settlement risk that requires consideration in the technical solution and operational service. this new, two stage model for
settlement may delay deployment and may lead to additional risks.
the definition and control of the operational rules, transaction processing and settlement requires the active involvement of all partici-
pants in the neutral switch. in relatively new markets and markets that have mmo schemes with significantly different levels of maturity,
ensuring that the operation of the joint venture gives an equal and non-exclusive, ‘level playing field’ to all participants will be essential.
this will require oversight, the body for which may be difficult to identify and potentially costly to engage.
13
