In a move that could significantly alter the landscape of payment processing, The Money Service Lab (MSL) has unveiled a new licensing model that enables banks, credit card issuers, and financial institutions to become their own card-issuing processors. This development comes on the heels of MSL's successful certification with MasterCard Europe and Visa LAC, positioning the company to offer its innovative platform on a global scale.
The significance of this announcement lies in the potential disruption it brings to the current payment processing ecosystem. With approximately 40,000 banks worldwide and only about 50 processors operating at scale, MSL's new model addresses a substantial gap in the market. The European Central Bank reported over 72 billion card transactions in Europe alone in 2023, highlighting the immense volume of transactions that could be impacted by this new approach.
Lee Britton, Strategy Director at MSL, explained the company's vision, which is based on the increasing prevalence of card-based transactions and the need for issuers to have more control over their processing systems. The new licensing model is the third and most ambitious scenario MSL has planned for, allowing clients to become certified processors in their own right, with full access to the platform's source code and customization capabilities.
This model has the potential to dramatically reduce costs for banks and issuers, who currently rely on a small number of external processors. By bringing processing in-house, these institutions can gain greater control over their operations and potentially pass savings on to consumers. The flexibility of MSL's offering, which allows clients to choose between managed, hybrid, or fully licensed models, provides a scalable solution that can adapt to the evolving needs of financial institutions.
MSL's platform is built on the robust ENGIN© switch, developed by sister company Muscato Corporation. This technology already handles an estimated 15% of all financial transactions in the USA through its licensed customers, lending credibility and proven performance to MSL's offering. The integration of ENGIN© into MSL's platform ensures that licensees benefit from a battle-tested system capable of processing approximately 9,000 transactions per second.
Conor Doyle, CEO of MSL, emphasized the rapid growth of card-based transactions, which are increasing at around 15% year-on-year. He pointed out the scarcity of processors globally and the opportunity for MSL to make a significant impact in this space. The company's platform offers multi-currency processing, spend controls, fraud and risk monitoring, and a unique 'Compliance as a Service' risk and AML system, providing a comprehensive solution for issuers.
The implications of this new licensing model extend beyond cost savings. It has the potential to foster innovation in the payment industry by allowing more institutions to develop and implement custom solutions. This could lead to improved services for consumers, more diverse financial products, and increased competition in the payment processing sector.
As MSL continues to obtain certifications globally, the company is poised to expand its reach and influence in the payment processing industry. The ability for financial institutions to license or purchase the platform outright, including access to the source code, represents a significant shift in how payment processing technology is distributed and implemented.
This development comes at a time when digital payments are becoming increasingly prevalent, and financial institutions are seeking ways to modernize their infrastructure. MSL's licensing model could accelerate this trend, enabling more agile and responsive payment systems that can keep pace with changing consumer demands and technological advancements.
As the payment industry continues to evolve, MSL's new licensing model may prove to be a catalyst for widespread change, empowering financial institutions to take greater control of their payment processing capabilities and potentially reshaping the competitive landscape of the global financial services sector.
