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Banesco Panama succeeds as a processor for ESG projects and fintechs after migrating to Way4

Banesco Panama has recently updated its technological stack related to payments as part of its business strategy to become a regional payment hub
Banesco Panama is a bank and a member of Banesco International, a large financial group operating in 14 countries in Europe, Latin America, and North America. The bank's ambitions were to expand its business beyond its home market and subsidiaries in the Dominican Republic and Curaçao. To realize its business goals, what had to change in its technological stack? How could it become an attractive processor to other banks and emerging payment players in Latin America? Why was Banesco Panama chosen to participate in a government social aid program?

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An obstacle to new payment revenue streams

Banesco Panama's processing business has been expanding for decades, so the bank’s team always realized that quantitative growth wouldn’t be the main challenge. They had foreseen many of the digital payment trends of 2020s and determined how their issuing and acquiring services would need to adapt. Their goal was to satisfy cardholders migrating from physical branches and stores to a fully online experience, and to support merchants prioritizing frictionless and secure e-commerce operations.  

At the same time, the team planned to add new revenue streams. Their strategy was to act as a processor for banks outside of Banesco International and for emerging financial startups. Another key strategy was to embrace open banking and monetize integration with all kinds of industry players — fintechs, biometric authentication companies, KYC agencies, loyalty solution providers, and others.  

To attract all target customer types and industry partners and to sustain its growth in volume, Banesco Panama had to overcome the limitations of its technical infrastructure.  In 2015, this was a set of legacy in-house and outsourced systems that could not be efficiently managed or integrated, nor could it provide the desired end-to-end digital customer experience. The bank team challenged themselves to migrate to a flexible, innovative, and cost-saving payments platform. 

Processing portfolio diversifications powered by Way4 in the cloud

Banesco Panama solved the challenge by choosing Way4, the white-label end-to-end payment software platform from OpenWay, and installing it in a private cloud that would accommodate fast growth while keeping infrastructure costs low.

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Marlene Fernández EVP of Technology Banesco Panama
Marlene Fernández, Executive Vice President of Technology of at Banesco Panama, explained the bank’s choice at OpenWay Club 2021, the C-level event for payment industry players. She stated: “The Way4 platform is robust, stable and scalable. It is cloud-agnostic which helps you easily scale up and down, as well as optimize costs. The last mile is that you can build an entire API-fied payment ecosystem capable of providing multiple services, both offline and online”.
Marlene Fernandez explains how the new digital payment platform contributes to Banesco’s business

To take into account all regional specifics and business requirements, OpenWay and Banesco created a joint core team. It included delivery and R&D experts working both on site and remotely. This approach resulted in a smooth, phased-out migration. As of 2021, Banesco's payment processing operations in Panama are running entirely on Way4. In the Dominican Republic, the issuing portfolio is now managed on the new platform, and the acquiring part is soon to follow.

The bank is using Way4 as a fully online end-to-end platform supporting the whole transaction processing cycle: card issuing and account management, tokenization, merchant acquiring, interfaces to Visa, Mastercard, UnionPay and local payment systems, clearing and settlement, financial reporting, digital customer onboarding, dynamic pricing management, and more. The bank's team quickly adds new features and products to the system using the pre-configured settings, tests them and starts servicing customers right away, adding complex, custom service options on-the-go. 

With the multi-tenant functionality in place, Banesco Panama provides processing services to various payment players across Latin America. Each player has separate and secure access to its own issuing and acquiring portfolio, and a wide choice of innovative payment products that may be launched. 

Relying on Way4's data-rich API, Banesco Panama connected its new processing platform to other systems within its perimeter and to external ones managed by various third-party providers. The holistic technological landscape ensures the quick roll-out of payment innovations. The bank's B2C and B2B clients get the benefit of a seamless, fully digital experience — from onboarding to making transactions and buying additional financial products. 

Banesco Panama today and tomorrow – the first results and new objectives

Banesco Panama today has the largest number of POS in the acquiring market of Panama and is the third largest issuer. Its customer base is constantly growing.

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One of the objectives of Banesco Panama is deliver superb customer experience both via cards - debit, credit and prepaid, - and digital channels, such as mobile wallet

In terms of serving the B2C segment, the bank stated at OpenWay Club 2021 that its "objective is to start working through the wallet, a marketplace where we can have many multiple transactions on a single device and that really begins to generate greater loyalty and achieve better customer experience".

As a processor, Banesco Panama recently onboarded several banks and emerging companies in the region, including Todoticket and Banreservas.

As a notable payment project carried out during the Covid-19 pandemic, Banesco Panama, Banreservas and Mastercard established a new model of social aid distribution in the Dominican Republic. In 2020 over a million of low-income families received a Christmas bonus from the government in the form of a prepaid card. Banesco handled the issuing aspect. The scalability and flexibility of its Way4 platform ensured the fast time-to-market for the social cards – less than a month from the project idea to the actual cards distribution. It also ensured secure and steady service for the high processing volumes of this project. The impact went beyond simply delivering monetary aid to the people, as it also allowed to include a portion of unbanked population into the banking system, giving them access to loans, deposits, and other financial products.

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Jaime Martínez Business EVP Banesco Panama
According to Jaime Martínez, Business Executive Vice President, Banesco Panama: “The company’s target for the next 3-5 years is to expand beyond the group’s borders and ensure that any payment made in Panama goes through Banesco’s service, as well as to achieve a greater presence in other Latam regions.”
Jaime Martinez talks about the business targets of Banesco Panama and things to lookout in the Latam payment market

To accomplish its mission, Banesco Panama continues to rely on OpenWay’s payment innovations. As of 2021, the Way4 platform is ranked as the "Best-in-Class" processing platform by Aite; a "Market Leader" in digital wallets by Ovum; and the "Best Payments Solution for Payment Systems in the Cloud" by Paytech Awards. It is recognized as a strategic investment not only for neobanks and wallet operators, but also for established processors and leaders in digital payments. 

Participation in OpenWay Club ensures that Banesco Panama's team can obtain valuable insights and best practices of Tier-1 issuers and acquirers using the same platform: Nexi, Worldline, LOTTE Finance, Ampol, and others. 

The Way4 roadmap takes into account not only global trends, but also the specifics of a rapidly digitalizing Latin America. Additionally, OpenWay is investing in this region by forming strategic alliances with local vendors and by expanding its own local team.