Money Service Lab Launches Innovative Licensing Model for Global Card Issuers

In a move that could significantly alter the landscape of the global payments industry, The Money Service Lab (MSL) has announced the launch of a new licensing model that enables banks, credit card issuers, and financial institutions to become their own card issuers and processors. This development comes on the heels of MSL's successful completion of MasterCard Europe certification and ongoing certifications with other major card networks.

The implications of this new model are far-reaching, considering the vast number of financial institutions worldwide that could potentially benefit. With approximately 5,000 banks in Europe alone and an estimated 40,000 globally, compared to fewer than 50 large-scale processors, MSL's offering addresses a significant gap in the market. The European Central Bank reported over 72 billion card transactions processed in Europe in 2023, highlighting the immense scale of the industry that could be impacted by this innovation.

Lee Britton, Strategy Director at MSL, explained that the company's vision was based on two key factors: a substantial increase in card-based transactions and a market opportunity for banks and issuers to become their own processors instead of relying on established incumbents. The new licensing model is the third and most ambitious scenario MSL had planned for, allowing clients to become certified processors in their own right, with access to source code and the ability to customize the platform as needed.

Mike Muscato, CTO for Money Service Lab, emphasized the technical prowess behind the new offering. The platform incorporates the ENGIN© switch from Muscato Corporation, which reportedly handles about 15% of all financial transactions in the USA through its license customers. This integration ensures that MSL's platform can process approximately 9,000 transactions per second, providing the robustness required for large-scale operations.

The potential impact on the industry is significant. Conor Doyle, CEO of MSL, pointed out that with card-based transactions increasing by around 15% year-on-year, there is a clear need for more processors in the market. MSL's solution aims to fill this gap by offering multi-currency processing, spend controls, fraud and risk monitoring, and a unique 'Compliance as a Service' risk and AML system. This comprehensive package could allow financial institutions to process their own cards at a fraction of the cost they currently pay to external processors.

For banks and financial institutions, the ability to choose between managed, hybrid, or licensed models offers unprecedented flexibility. The option to purchase the platform as an instance with full access to the source code provides a level of control and customization that has been largely unavailable in the industry until now. This could lead to increased innovation, improved customer experiences, and potentially lower costs for end-users of card services.

The global reach of MSL's initiative is notable, with the company already certified in Europe and Latin America Caribbean and plans to expand certifications worldwide. This expansion could democratize access to advanced payment processing technologies for financial institutions in emerging markets, potentially accelerating financial inclusion and modernization of payment systems globally.

As the payments industry continues to evolve rapidly, with digital transactions becoming increasingly prevalent, MSL's new licensing model represents a significant shift in how financial institutions can approach card issuance and processing. By empowering banks and issuers to take control of their card systems, this development could spark a wave of innovation and competition in the payments sector, ultimately benefiting consumers through improved services and potentially lower fees.

The long-term effects of this new model on the payments ecosystem remain to be seen, but it has the potential to disrupt the current oligopoly of large processors and create a more diverse and competitive landscape. As financial institutions evaluate this new opportunity, the industry will be watching closely to see how many adopt MSL's platform and what innovations emerge as a result of this increased autonomy in card processing.