CPRAS are the UK’s pre-eminent payment processing consultancy. They have designed and delivered Europe’s first Payment Services Framework to be available not just for governments but for private sector enterprises as well. In this interview with Finance Monthly, Andy Flavell (CPRAS’ Partnerships Director) explains how their vision for local councils and trade associations is changing the UK payments landscape.
There is a lot of talk about the CPRAS Payment Service Framework. I know that, in most interviews, you like to focus on the innovative aspects of the Framework which allow the public sector to effectively remove themselves from PCI DSS compliance, but could you tell us more about how and why you set up a Public Sector Framework with a Private Sector mirror image?
The payments industry tends to surround itself in mystique, but under the surface it’s just like any other. If you are a massive client placing a huge order, then you can negotiate better quality and price deals than the small business can ever hope to get.
When we were building the PSF, we were actually putting together probably the biggest tender for payment services in EU history. We knew that we would get the best value service packages ever seen in the Public Sector and it seemed obvious to create the mechanisms that would allow Private Sector businesses to access these market-beating packages.
And what are those mechanisms?
We call it the Optimiser. Essentially, it’s an app which cuts through all the complexity around payment services.
The problem is that there is a very real difference between providing payment processing services to a business than to a government office. Processing payments carries risk – for example, a furniture business could close after taking deposits but before delivering the goods. In that case, the processor would have to repay the business’ debts. Risk costs – more “risky” processing will always be more expensive.
In the PSF, we asked the service providers to give a cost matrix for every type and size of business. In fact, the PSF had over 200,000 cost input options.
When we give an Optimiser to a Local Council, they can use it to identify and introduce the best payment processing rates and service packages available for any local business, from a corner shop to a global corporation. The Optimiser provides that business with a detailed breakdown of all the savings that they could achieve.
It’s all risk-free, but when businesses select a PSF service package, the provider will pay the Local Council a small % of the processing fee – for every transaction processed. Everyone wins: The Council has more profitable local businesses which recognise the additional help they have provided. The business benefits from service packages that have been based on one of the largest tenders in history. Even the service provider benefits, as they get new customers across a broad range of risk profiles.
So businesses should ask their local council if they have a CPRAS Optimiser?
Yes, or they could ask us who has an Optimiser that they could use. We are providing Optimisers to accountancy firms, Trade Associations and business support organisations.
The payments industry seems to be changing far more rapidly than ever before. Obviously CPRAS are right at the front of this FinTech explosion so what’s next on the horizon for you?