Ericsson is working with financial technology company FIS on a new platform designed to make it easier for companies to launch digital wallets and other financial services without having to build or integrate quite as much of the underlying technology themselves.
The collaboration will combine FIS’s payments and card-issuing capabilities with Ericsson’s existing Fintech Platform, which provides cloud-based wallet infrastructure and open APIs. In practical terms, the idea is to bring together several of the systems normally required to build a digital financial service, including payments, banking connections, ledgering, identity and compliance, rather than expecting companies to integrate each of them separately.
That integration work is often one of the less visible parts of launching a financial product. Building an app with a digital wallet is one thing. Making sure money can actually move between accounts, keeping an accurate record of those transactions, verifying customers and complying with financial regulations involves quite a few more moving parts.
FIS CEO and president Stephanie Ferris says fragmented infrastructure is one of the reasons companies can take so long to bring these products to market.
“Organizations want to bring wallet-led financial services to market faster, but too often they are slowed by fragmented infrastructure and complex integrations,” she says. “By working with Ericsson, FIS wants to remove that friction with trusted capabilities that come connected across the money lifecycle, giving clients a faster, simpler path from idea to deployment.”
The planned platform isn’t aimed only at banks or traditional fintech companies either. Ericsson and FIS say telecom operators, retailers, healthcare companies and government organisations could all use it to build financial services of their own.
That’s hardly a strange list anymore. Mobile operators have spent years moving beyond airtime and data into payments and financial services, particularly in Africa. Ericsson’s existing fintech business already puts it behind some of those services, while operators themselves increasingly see financial services as another part of what can be built on top of their networks.
MTN’s recent results, for example, show how much more ambitious that relationship has become. Mobile money is no longer simply an additional service sitting beside connectivity. For large African operators it is becoming an increasingly important business in its own right, spanning payments, remittances, merchant services and other financial products.
There’s a similar push happening elsewhere in African payments, where the problem increasingly isn’t whether people want digital payment services, but how easily the various pieces of the system can talk to each other. The recent Yuno and Onafriq partnership, for example, is partly about making it easier for businesses to connect to payment methods across several African markets without dealing with every integration individually.
Quite a lot of money already moves through Ericsson’s platform
Ericsson isn’t starting from scratch here. Its Fintech Platform has been operating for more than 15 years and the company says at least 131 million people used it to make transactions during the past 90 days. Around $80 billion currently moves through the platform every month. That gives some idea of the scale of the infrastructure FIS is plugging into.
Under the proposed arrangement, FIS would add its payments and issuing technology to that existing wallet system. The companies haven’t announced individual customers for the combined platform yet, and the language in the announcement is still deliberately forward-looking. They describe it as an “envisaged partnership platform”, so this isn’t a finished service suddenly becoming available to businesses this week.
Ericsson CEO Börje Ekholm says fintech has become a growth area for the company as telecommunications and financial services become increasingly intertwined.
“As money and value exchange become increasingly digital, Ericsson’s fintech offerings provide communication service providers, enterprises and broader segments with the confidence to innovate and scale,” he says.
There is, admittedly, something slightly odd about thinking of Ericsson as a fintech company. Most people still associate the name with mobile networks, radio equipment and the infrastructure sitting behind their cellphone connection. But that network business already puts Ericsson fairly close to the operators that run some of the world’s largest mobile-money platforms. Adding more of the financial infrastructure around those services is therefore not quite the sideways move it might first appear to be.
For companies wanting to launch a wallet, payment service or some other financial product, the appeal is simpler. They would still need to decide what service they actually want to offer, deal with the relevant regulations and persuade people to use it. Ericsson and FIS are trying to reduce how much of the technology underneath that service they need to assemble themselves.