The “father of Software Quality”, Watts Humphrey expired on Thu 28-OCT-2010.

When Watts Humphrey arrived at the Carnegie Mellon Software Engineering Institute (SEI) in 1986, he made what he called an “outrageous commitment to change the world of software engineering.” During his tenure at the SEI, he established the Software Process Program, led development of the Software Capability Maturity Model, and introduced the Software Process Assessment and Software Capability Evaluation methods. These later became the basis for the development of the Capability Maturity Model Integration (CMMI), a framework of software engineering best practices that has been adopted by thousands or organizations throughout the world.

Citi’s various technology divisions, including but not limited to Citicorp Overseas Software Limited (COSL), CiITIL, Citibank Asia Pacific Technology, were some of the pioneers to have adopted SEI-CMM.

CMM has also become the basis for various Maturity Models including the Payment Maturity Model (PMM) a work-in-progress model introduced at SIBOS 2010 last week.

The World Payments Report 2010 produced by Cap Gemini, The Royal Bank of Scotland and EFMA (European Financial Management and Marketing Association) explores the global payments market and the key challenges presented by the evolving payments landscape. It draws on 13 executive interviews with 11 major banks (including ABN Amro, BNP Paribas, Citi), and 2 clearing houses to balance global. regional and local points of view. This year’s report covers the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Hong Kong, India, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, Poland, Portugal, Russia, Saudi Arabia, Singapore, Slovenia, South Africa, South Korea, Spain, Sweden, Turkey, the Ukraine, the U.K. and the U.S.

Now in its sixth year, , the report describes how banks will need to consider their options carefully for optimising their payments businesses, as the transformation of the payments value chain is accelerating. It then focuses on how banks will need to employ an intense parallel strategy, comprising revenue-focussed and cost-focussed initiatives, leverage sourcing strategies and consider mechanisms such as Payments Hubs to make these parallel strategies feasible and allow banks to achieve more with less.

The report is divided into 3 main sections

1. World Non-Cash Payments Markets and Trends
2. Payments-Related Regulatory Update
3. The Transformation of the Payments Value Chain Is Accelerating

It has a case study on Paypal. PayPal has established itself as a global payments processor, facilitating €51.3 billion in total payments volume (TPV) in 2009 and making it the world’s largest online Payments Service Provider (PSP). In 2009, PayPal accounted for almost 6% of all global online payment transactions (and 7.5% of online payments in the U.S.), capturing a significant share of revenues that could have gone to the banking industry. Along with its international expansion, the proportion of revenues derived solely from eBay has declined as a percentage of total revenues—to 42% at the end of 2009. In 2009, PayPal revenues were around €1.89 billion, nearly one-third of which was derived from U.S. sellers and nearly 40% from cross-border transactions.

Key findings

• Global payment volumes  continued to grow, despite the financial crisis.
• Globally, use of non-cash payment instruments continued to grow and  cards remain the preferred non-cash payment instrument (accounting for  more than 40% in most markets  and 58 % globally). Rate of growth was faster in developing economies.
• Alternative payment service providers (PSPs) have made significant strides in m-payments and e-payments, even though they still account for a small percentage of total worldwide transaction volumes.
• Cash-in-circulation in the Eurozone maintained a steady growth of about 11% per year since 2002, representing a significant cost for global economies
• Several developments have taken place in last year towards SEPA and PSD in Europe
• Regulatory pressures continue to affect the payments industry worldwide
• New technology and competition are making the payments universe more complex and expansive and, together with the effects of the economic crisis, new regulatory initiatives are acting as catalysts to the further evolution of the industry

You can download the report from

• Cap Gemini site (requires login)
• RBS Sibos website (pdf)
• EFMA (Only members can download. Requires login)

The report presentation and roadshows will be held at the following locations on the dates

• Vienna, Thursday 4 November
• Stockholm, Monday 15 November
• London, Wednesday 17 November
• Frankfurt, Monday 22 November
• Utrecht, Wednesday 1 December
• Brussels, Thursday 2 December

Citi Global Transaction Services (GTS) today announced the launch of an industry initiative  – The Multi-Bank Global Trade Program. Leveraging its global footprint, this initiative affords Citi an opportunity to address market challenges in partnership with other Trade banks while garnering benefits for clients.

The Multi-Bank Global Trade Program,  pioneered by Citi, seeks to establish an origination and funding platform for Trade banks with complementary market positions, thereby creating a diversified, granular pool of funded Trade assets. With this collaboration, participating banks would realize the benefits of asset de-recognition, credit relief and lower funding costs, which are difficult to achieve through a stand-alone market execution.

Emmeline Wexer, Global Head of  Trade Asset Advisory,  Citi GTS said “Each bank may rationalize its participation differently, such as a greater need for capital relief vs. funding and liquidity. However, collaboration among the participating banks, sharing a common goal of creating the most efficient funding platform to support the financing of global trade flows, is ultimately the most important ingredient to achieve success”

John Ahearn, Global Head of Trade, Citi GTS said, “This Multi-Bank Global Trade Program is another way that Citi is supporting the Global Trade market and providing ways Trade banks can grow their trade finance portfolio in an efficient and effective way.”

Global Transaction Services (GTS), a division of Citigroup’s Institutional Clients Group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world. With a network that spans more than 100 countries, Citigroup’s GTS supports over 65,000 clients. As of the third quarter of 2010, it held on average $340 billion in liability balances and $12.4 trillion in assets under custody.

On 25-Oct-2010, Visa Inc, in its press release announced that its opening World’s Leading Payments Network to Independent Developers. Authorize.Net Developer Center Enhanced to Facilitate Creation of Innovative Electronic Payments Applications.

The Developer Center builds on Authorize.Net’s existing platform, which Visa acquired as part of the purchase of CyberSource earlier this year. Developers will have at their fingertips the resources needed for rapid development and deployment of payment applications that extend the value and power of electronic payments for consumers, merchants and financial institutions. These can be created to run on a variety of devices, from PCs to smartphones, and could support applications including eCommerce transactions, mobile transactions, person-to-person payments and payments at the physical point of sale. The Developer Center acts as a central community with tools and advice that developers at any level can use to readily connect through CyberSource to VisaNet along with other payments networks, and will be available free of charge.

“Visa has developed many innovative network-based payment products and services. But when you combine the power of our network, the resources of the Developer Center and the creativity of software developers, there’s no limit to the innovations that can emerge,” said Jim McCarthy, Global Head of Product for Visa. “Good ideas come from a variety of sources. We believe that opening our network to the developer community is critical to fueling innovation and driving one of Visa’s central goals, extending the benefits of digital payments to anyone, anywhere, using any device.”

Paypal everages on developers. It has dedicated developer community Paypalx Developer Network and is currently holding a conference Paypalx Innovate 2010 Developer Conference.

SWIFT is currently holding SIBOS 2010. SWIFT Swift CEO Lázaro Campos has launched the banking co-operative’s annual Sibos conference by calling for more innovation from bankers and technologists.

“Making innovation mainstream is a significant shift. Our innovation team has been going for three years and we have not even started yet so that is why we need your help.” , Campos said.

SWIFT has its own Developer Resource Center. But its restricted and is not freely available  for independent developers. Will it take the bold step of opening it up at SIBOS 2010 or will the Innotribe announce The Long Now?

Payments Maturity Model (PMM), a work in progress modeled after the Capability Maturity (CMM/CMMI), was introduced at the first Day SIBOS 2010 session titled Introducing an Important Industry Tool – The Payments Maturity Model.

Five stages are identified in the PMM:

1. Reliable;
2. Scalable;
3. Efficient;
4. Responsive; and
5. Agile.

This new model assesses a bank’s current position and determines next steps in that bank’s evolution towards an agile payments environment.

The PMM provides direction on the order and types of activities required to progress to the next stage, and assists with creating the business case to invest in that.

The speakers of this event were

• Michael Anderson, Senior Vice President, Union Bank
• Nancy Atkinson, Senior Analyst, Aite Group
• Louis Blatt, Chief Product Officer, ACI Worldwide
• Leo Lipis, Founder & Chief Executive, Lipis & Lipis GmbH

While researching on this topic, I also found a whitepaper titled Payments Maturity Model by Andy Mayer, Sep 2008 [pdf] which introduced the concept developed by Dovetail through years of experience of working with banks on their payment systems.

This model defines 5 maturity levels

1. Fragmented payments
2. Payment Silos
3. MIS managed Silos
4. Payment Hubs
5. Universal payments

This model takes into account the following key constituencies in a bank payment’s operation

• Sales
• Product Management
• Operations
• Technology

It will interesting to see who will own the registration or trademark for PMM.

FIS™ (NYSE: FIS), one of the world’s largest global providers dedicated to banking and payments technologies, announced that it has signed a definitive agreement to acquire Capco, a global business and technology consultancy dedicated solely to the financial services industry.

Details of the press release are at http://www.capco.com/content/press-release-10192010

Symphony Technology Group (STG), a leading private equity firm focused on investing in software- and technology-enabled services companies, which owned Capco, in its press release stated that Capco, has signed a definitive agreement to be acquired by FIS (NYSE: FIS) for approximately $300M

FIS (Fidelity Information Services) was founded in 1968 as Systematics™ and, through its core processing system of the same name, quickly became a globally recognized provider of technology solutions for financial institutions. ALLTEL Information Services acquired Systematics.In 2003, Santa Barbara, Calif.-based title insurance giant Fidelity National Financial® bought the financial services division of ALLTEL Information Services and renamed it Fidelity Information Services.

In 2009, it had acquired Metavante.