Matchmakers’ Secret Friction Fighter

Iliad Solutions Payment Testing

Friction is what matchmakers see as an opportunity for innovation. It can also sink their best-laid plans. Anthony Walton, founder and CEO of Iliad Solutions, joined this week’s The Matchmaker Is In series, hosted by Karen Webster and economist and “Matchmakers” author David Evans, to talk about how matchmakers in payments use testing to increase the odds of their success.


Friction is what matchmakers look for in existing businesses and see a path to innovate and disrupt as a result. And it’s what can also sink the best of them.

In this week’s episode of The Matchmaker Is In series, hosts Karen Webster and David Evans, economist and author of “Matchmakers: The New Economics of Multisided Platforms,” spoke with Iliad Solutions Founder and CEO Anthony Walton on an interesting twist on the matchmaker conversation. Their conversation focused on a little discussed yet critical piece of the payments matchmaker puzzle that is crucial to identifying the frictions that can make or break the ignition experience.

Payments testing.

Walton said that it may seem like a no-brainer to ensure adequate testing takes place before any new payments software hits the market but that you’d be surprised how many solution providers end up cutting corners where it counts the most.


Vulnerable To Assumptions

Walton said that it’s not as though solution providers want to cut corners. And they understand the need for testing. But they just want it too late in the process to get started.

That, he said, isn’t really a great idea since many of the new interfaces and technologies, such as digital wallets and tokenization, tend to be bolted onto legacy systems and rarely do these new initiatives and innovations work independently of existing payment schemes.

The dependency on legacy systems is increasing — at the same time that these newer technologies “are just being laid on top” and expected by the software developers to work properly.

The rest: Traditional systems get more and more stretched — at the same time that the testing windows get more and more narrow.

“We are testing like it was 20 years ago. We are still assuming that we have these monolithic systems, and they’re really not anymore,” Walton explained.

He noted that many companies with legacy systems assume that interfacing with new pieces of technology simply means interfacing with an API. Relying on the assumption that integration simply means putting the right API in place can be a risky call.

Oftentimes, testing shows that the API is working perfectly but then some feature of the legacy software, which was never perhaps exposed before, comes to the forefront and causes an issue.

“The problem is that it’s very hard to first guess all these changes ahead of actually integrating the systems together. There is a lot of interdependencies between components, and every component in a chain can be a point of failure,” he added.

Walton’s message is that companies cannot assume everything in a legacy system is going to be 100 percent compatible with the new technology.

When it comes to bringing new propositions to the market, Walton said that the challenge lies in not only making sure it works but also making sure that there is a streamlined integration between the consumer touchpoint and the network rail touchpoint.


Tackling Tradeoffs

Fundamentally, testing has to match the real, live system as much as possible, which is why Walton said using virtualized simulation of all the endpoints is so important. Unless virtualized coverage of every component is available, he explained that it’s very difficult to automate testing.

But many companies are turned away by the exponential costs and complexities that come with running multiple simulation points.

Walton said that, as tempting as it may be to cut back, it can be on the very edges of the testing where bugs and problems are discovered.

Another pain point of payments testing, lies in the timing.

As Walton described it, testing is almost like the Cinderella of the IT industry, something that can be easily left right until the end.

Walton said that his challenge is shifting the mindset for companies, trying to put the facilities and virtualization concepts in place that allow new market entrants and the people tasked with the delivery of the software to start testing earlier in the cycle.

But time isn’t always a luxury when companies are pushing to bring things to market.

If a solution provider is trying to launch a digital wallet in competition with three other digital wallets, missing a deadline is expensive.

When deadlines can’t move, this compresses the testing time, and that’s when people start cutting corners, Walton said.

“Nobody wants to be the guy crossing his fingers when putting software into production,” he pointed out. “It’s very hard to make a mistake in public now, but that’s the risk you take if you cut corners.”

There are still other factors — outside of the solution provider’s domain of development — that can impact testing.

Technological changes, keeping up with the moving target of security and even mandated compliance-related requirements all have the ability to alter the testing environment and capabilities for a company.

“There are a number of internal and external factors that are pushing the payments system all the time, and it’s never at rest,” Walton said. “Things that aren’t at rest are liable to be complicated to test and liable to failure.”

Thoroughly testing all aspects of a new payment system or technology — whether it’s a part of something the end customer sees or not — requires ensuring it will work through every scheme, through every issuer and that any clearing and settlement functions will work as smoothly as they should, Walton stated.

When it comes to “matchmakers” that are doing things right, Walton said payments networks themselves are very underrated. They are making great strides in testing and innovation through the adoption of new technologies that are helping to provide better coverage and distributing testing around the world.

“The [payment] schemes are putting a huge amount of investment into ensuring these rails are suitable for moving forward,” he added.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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