Certegy Inc. has joined the list of processors that are outsourcing the development of tools to test new payment systems.
Like others, the Alpharetta, Ga., company concluded that by itself it could not keep pace with changes in the payments industry.
"Rather than continuing to build and maintain our own application, we decided to have Paragon build the simulator for us," said Ralph Calvano, Certegy's vice president of electronic funds transfer services.
He was alluding to Paragon Application Systems Inc. Certegy is using the Holly Springs, N.C., company's FASTest simulation software to test its own switching software and, it hopes, implement new software more quickly.
Gary Kirk, Paragon's president, said his other customers include First Data Corp.'s Star network, Metavante Corp.'s NYCE network, the Fiserv Beaumont subsidiary of Fiserv Inc., and Genpass Technologies Inc.
The growing popularity of electronic payments is behind the growing use of simulator vendors such as Paragon, Level Four Software Ltd., and Lexcel Solutions Inc. The automated teller machine systems and other systems of banks, processors, and EFT networks are under more stress and often need software upgrades or new transaction processing applications.
"There's always new functionality coming to ATMs and banks, and they're not in the business with keeping up with test tools," Mr. Kirk said. "It's a full-time job to provide tools that are friendly and usable and keep up with the current technology. It's just not worth their time and effort."
He said the goal for testing is to allow a new application or software to work correctly as soon as it is installed.
Tim Sloane, the director of debit advisory service for Mercator Advisory Group Inc. of Shrewsbury, Mass., said: "This is similar to writing software for flight control planes. You're in an environment where failure is not acceptable. So you need all the systems under all circumstances to work correctly."
It is tedious work, though.
"The environment has become so complex that even a minor change like adding balances to a receipt" can take up to a year, Mr. Sloane said.
Mr. Kirk said his simulators can relieve some of the tedium by doing faster tests.
For example, instead of standing in front of an ATM to make sure that every possible transaction is working properly, "a developer can sit at desk at a PC instead of at an ATM, simulate inserting the card, entering the PIN, selecting a transaction by pushing a button," Mr. Kirk said. "The screens look correct, and if it's wrong you can fix it right there on the fly."
Paragon's software can test individual machines as well as stress on a system. It does the latter by simulating hundreds of transactions coming in per second, which is typical for banks with large ATM networks.
Mr. Kirk and his three partners, who started the company in 1994, came up with the idea of simulation testing at a PC because they were familiar with the arduous task of testing ATMs.
Before founding the company the four worked for an ATM technology vendor, helping to install software. This often involved standing in front of the machines "testing one transaction at a time," Mr. Kirk said.
Warren Coles, the chief operating officer for Pulse EFT Association, a subsidiary of Morgan Stanley's Discover Financial Services Inc., said testing has become a bigger job for the Houston EFT.
Pulse has been using Lexcel software simulators to test transactions and processing software for seven years, Mr. Coles said. That has helped it adapt to mandates such as the new Triple Data Encryption Standard for ATMs and to gift cards and other new forms of payment, he said.
"The testing tools have been a great aid to both us and our customers," he said.
