TPS Pakistan Private Limited is engaged in developing indigenous software for banks and non-banking companies that enables them to electronically conduct cross-transactions of their account holders and clients.

The robust growth in information technology has placed TPS across the globe; it has around 120 customers in over 30 countries. It largely focuses on Asia and Africa, home to major developments in the field of IT.

The company’s CEO, Shahzad Shahid, says the TPS’ Middle East office strived hard to get a ‘work award’ from the UAE central bank on projects like the National Payment Gateway, the National Pos Switch and Core Switch (Iris), after facing tough competition from American companies.

The project is in progress and the UAE central bank has shown confidence in the software company after, what he described, initial hesitation.

TPS, which had started with two people, now has a workforce of over 250 people. It has not taken any bank loan or credit facility, and has fully financed its business operations with its own resources.

Shahid suggested that the government should invest heavily in education, right from the primary stage, to help the youth excel in IT and earn billions of dollars. However, he rejected the current dual system of education — one for the poor and another for the rich, which is creating distortion in the society.

The company’s achievements have been made possible by two young Pakistani engineers who, after completing higher education in the US, came back to their home country in the early 1990s.

Mohammad Sohail and Mubashir Rahim worked for a short period with NCR (which is primarily engaged in selling servers and ATMs), before they formed their own software house. With almost no investment except for two personal computers, the two worked hard and kept looking for gaps in networking connectivity, particularly in the banking and financial sectors.

As of today, around 40 scheduled and microfinance banks are part of the 1-LINK network

Talking to this writer in his office at TPS Tower off Shahrah Faisal, Shahid, the CEO, said when Sohail and Mubashir started their own venture, most banks did not have online network connectivity to operate their automatic teller machines (ATMs) after banking hours.

At the time, an imported software was being used which enabled individual banks to have links with their own ATMs, and that too only during banking hours.

In the absence of an ‘ATM switch,’ banks could not discharge their core banking application. Similarly, there was no backup facility that could provide banks data about accountholders for ATM transactions. Above all, banks were also not covered under networking and their ATMs could not accommodate other banks’ accountholders.

In short, banks needed to have 24/7 connectivity with their own ATMs as well as those of other banks to make it possible for customers to use an ATM of any bank anywhere, regardless of whether they had their accounts at that bank or not, explained Shahid.

In order to integrate banks’ networking, Sohail and Mubashir set-up TPS in the mid-1990s and managed to develop an ATM ‘switch’ — ‘Phoenix’ — which allows 24/7 online bank connectivity.

However, before the Phoenix switch could be used, there was the issue of databases of accountholders of each bank.

To resolve it, Shahid said, TPS developed a database alongside the Phoenix switch which allowed access to accounts of all bank customers, so that when branches go offline, all the data is transferred to AMTs’ databases connected with the switch.

As a result of this, any accountholder of any bank in any city of the country could withdraw cash from any ATM. In a way, this also proved to be a win-win for all banks. For instance, if a bank has, say, 10 ATMs in a city, its customers will be have access to a 100 or so other ATMs in the area belonging to other banks.

This online networking system involving the Phoenix switch and the associated database was named 1-LINK. Since all banks have now joined this, the banking association has formed a guarantee limited company by the name of 1-LINK, he said. As of today, around 40 scheduled and microfinance banks are part of the 1-LINK network.

Quoting SBP statistics, Shahid said there has been a rising trend in electronic transactions in banking and non-banking sectors, whereas paper-based and ATM cash transactions have declined.

On a quarterly basis, in the first quarter of FY14-15, paper-based transactions fell by 6.5pc in terms of volume. Meanwhile, internet, POS, mobile and call-centre transactions rose by 8.2pc, 8.3pc, 14.6pc and 20.9pc in volumetric terms. ATM transactions decreased 3.1pc in volume; yet, the number of ATMs grew 2.4pc to reach 8,438 units.

One should understand that the IT sector has no limits, and that it is not rooted in a single place, he said.

Shahid also disclosed that TPS developed the Inter-Bank Fund Transfer (IBFT) technology, which allows third party fund transfer from bank to bank or interbank transfers in real time.

IBFT allows an individual to conduct basic banking transactions through the internet, mobile phone, ATM or the bank’s call centre; all of this is being facilitated by the Phoenix switch. He felt proud that this has been achieved by indigenous technology and software.

Similarly, he said the Utility Bills Payment System (UBPS) software was also developed by TPS. It allows customers to pay their bills online, through smart phones, or through branchless banking facilities like easy-paisa, UBL Omni etc.

All kinds of transactions, including paying utility bills, school bills and airline fares, as well as making charity payments and withdrawing cash or transferring funds, can now be done through the internet, call centres, ATMs or phone banking. “And this is what we call a dream come true for TPS,” he maintained.

All online networking and connectivity functions are currently being carried out by TPS’s Iris system, an improvement upon the Phoenix switch. This system even monitors and manages ATMs with regards to low cash, switching off power and disconnection from networking. The relevant information is passed onto banks by the Iris system.

Published in Dawn, Economic & Business, January 19th , 2015

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