IBS Journal February 2015
Jordan: MX marks the spot
The banking sector in Jordan is set to undergo a revolution in the coming months, thanks to work behind the scenes to improve the country’s infrastructure. Maha Bahou, executive manager of payments systems and domestic banking operations at the Central Bank of Jordan, explains the changes.
The Central Bank of Jordan (CBJ) has been looking to bring the country’s payments infrastructure up to speed and is now at the point of overtaking its regional rivals, when a comprehensive overhaul – with a new real-time gross settlement system (RTGS), a new mobile payments switch, a new automated clearing house (ACH), and a few other systems – starts to bear fruit through the course of 2015. The CBJ is aiming for a situation where
all of its systems are fully integrated, and all payments are cleared in real-time or at least same-day, with the RTGS compatible with the latest Swift messaging standard (MX), and the mobile switch reachable by every Jordanian citizen – even those without smartphones or bank accounts – and available as a platform to offer services to any company that wants to. A number of local and international
suppliers are involved in the effort, as is Swift. The UN has taken an interest as well, not least because of the large number of refugees presently in the country, which had to be factored into the CBJ’s strategy for financial inclusion. The payments landscape of Jordan
will be transformed once this effort is complete, with anyone able to initiate and
receive mobile payments, regardless of what phone they have and which bank, if any, they patronise. The scope of mobile payments will be wider than this, however, with the government seeing it as a vehicle for financial inclusion, as well as a more efficient way of disbursing payments on its own account.
RTGS and ACH
The largest single component is the new RTGS system. Jordan has had an RTGS since 2001, supplied by France-based Atos. ‘It was good at that time, but with the latest developments in technology, new features and requirements were needed,’ says Bahou. And systemically important solu- tions should not run for much more than ten years anyway, she adds. So the bank considered options for either upgrading or replacing it. Atos proposed an upgrade path, and it
was joined by nine other candidates. These included Italy-based SIA, Sweden-based CMA Small Systems, US-based Montran and ProgressSoft (which is a Jordan-based company). ‘When we did the analysis we found that CMA has a full architecture that covers all of our needs,’ says Bahou. CMA’s RTGS offering could be used via
‘We had restrictions previously with the MT format, in terms of figures we could include, language, spaces, number of characters and so on. But MX is much more flexible than MT.’
Maha Bahou, Central Bank of Jordan
a virtual private network, and had good business continuity options. CMA was able to clear the hurdle of having existing im- plementations of its RTGS product, which some of the other suppliers could not. The CBJ also took the opportunity to acquire other systems from CMA at the same time, to help with its open market operations. ‘As the central bank we are the manager of the local debt market, so we expanded our RTGS to include a depository system for government securities, with an automatic auction application for government
28 © IBS Intelligence 2015
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analysis: jordan’s payments infrastructure
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