Implementation of Ghana Retail Payment Systems Infrastructure

BANK OF GHANA

Tender Documents Selective Tendering

Implementation of Ghana Retail Payment Systems Infrastructure Request for Proposal May 2016

Invitation for Tenders The Republic of Ghana (BANK OF GHANA)

SELECTIVE TENDERING PROCUREMENT OF TECHNICAL SERVICES 1. The Bank of Ghana intends to apply part of its budget for 2016 to fund eligible payments under the contract for procurement of Technical of Technical Services for the Implementation of Ghana Retail Payment Systems Infrastructure in Ghana. 2. The Bank of Ghana now invites sealed Tenders from eligible suppliers or their authorized representatives for the procurement of items in the table below: PACKAGE NUMBER

GR/BOG/TS/0007/2016

DESCRIPTION

Technical Services for the Implementation of Ghana Retail Payment Systems Infrastructure in Ghana

COST OF TENDER DOCUMENT

Free

TENDER SUBMISSION DATE July 04, 2016

3. Tendering will be conducted through the Selective Tendering procedures specified in the Public Procurement Act, 2003 and in the Guidelines of the Procurement Authority of the Republic of Ghana. 4. A complete set of hard copy of Tender document may be obtained by interested eligible suppliers at the address below from Mondays to Fridays between the hours of 09:00am to 4:30p.m. The document will be available from May 27 to July 04 2016. 5. Tenders shall be valid for a period of 90 days after the deadline of Tender submission. All Tenders must be accompanied by Valid IRS, VAT Registration, Certificate to Commence Business and SSNIT Clearance Certificates. Tenders must be delivered to the address below on or before 10:00am Monday, July 04, 2016. 6. Tenders will be opened in the presence of the Tenderers’ representatives, who choose to attend at the Bank of Ghana Auditorium, Head Office, 4 th Floor at 10.00am local time on Monday, July 04, 2016. Late Tenders will be rejected.

LOCATION AND CONTACT PERSON FOR ALL ENQUIRES: Mr. Gilbert Addy Bank of Ghana Information Technology Department High Street 1st Floor Email Address: [email protected] Tel.: 0302-666902 ext. 4134

LOCATION FOR OBTAINING TENDER DOCUMENT: The Procurement Manager Bank of Ghana Cedi House 3th Floor Room Nos. 313, 309 and 310. Tel.: 0302-665252 ext. 5323/5356/5321

LOCATION FOR TENDER SUBMISSION: The Secretary’s Dept. Bank of Ghana 4th Floor Room No. 422 Tel.: 0302- 666902 ext. 4471

The Bank of Ghana (BOG) Request for Proposal – Ghana National Switch and Mobile Payment System

1. Introduction 1.1

Background

Bank of Ghana (BOG) seeks for the establishment of an integrated and interoperable electronic national payment system in Ghana. This is in line with its policy objective of averting the development of fragmented payment systems, which may not be efficient on liquidity and also increase the cost of payment transactions. To this end, the BOG requires the implementation of an electronic payment infrastructure, which will connect with and complement the existing electronic inter-bank payment and settlement systems in Ghana. Currently, there is interoperability in the payment cards subsector in Ghana, facilitated by the ghLink payment switch for locally branded payment cards on one hand, and on the other hand, an international payment switch for international payment card brands such as Visa and MasterCard among others. Efforts are underway to integrate these two categories of payment cards for switching on a common platform to enhance the overall efficiency of payment cards in Ghana. Besides payment cards that are being provided by Banks, BOG has licensed non-bank entities to operate business as dedicated electronic money issuers (DEMIs), by enabling digital funds transfer using mobile phone as the payment device. At the moment there are four (4) mobile network operators, namely; MTN, Airtel, Tigo and Vodafone that are operating in the electronic money issuance space. However, the payment platforms of the operators are not interoperable; thereby fragmenting the electronic money ecosystem, resulting in suboptimal performance. It is in aligning the operations of the electronic money ecosystem to the payment system policy objective of BOG that this RFP is being implemented. BOG through this tender seeks a vendor to supply, implement, own and operate operate an integrated and interoperable Mobile Payment Systems Systems Infrastructure (MPSI), as a turn-key solution project project – that – that is, all components must be supplied and/or integrated by the vendor to create a fully tested, working system meeting meeting the requirements of this RFP. The successful tenderer tenderer will be awarded a contract by BOG to supply, and implement MPSI, including hardware, systems software, and application application software at the tenderer’s own expense, and own and operate the delivered system. BOG will use the system as a monitoring tool for payment system oversight. The successful tenderer will provide the technical training needed for staff of participating institutions, namely; BOG, banks and mobile money operators (MMOs) to be able to use and support the MPSI. The BOG has confirmed its commitment to facilitating development of a comprehensive and properly regulated national payments systems infrastructure, so that the market does not develop piecemeal or with inconsistent standards. The Banks, Payment Service Providers (PSP) and MMOs are the ultimate beneficiaries of the BOG’s effort. effor t. BOG, as the payment systems regulator, will have oversight responsibility of the MPSI.

1.2

Existing Payment Systems Infrastructure

The Ghanaian Payment System (IPS) presently comprises the following components:

RTGS

The Real Time Gross Settlement system for high value payments

BOG GhIPSS

CCC

Cheque codeline clearing with truncation. This system enables the electronic clearing of cheques with cheque images.

ACH

Automated Clearing House for bulk debit and credit funds transfers

CSD

Separate CSD exists for both Government and BOG Securities Registration and Settlement System and equities. Plans are underway CSD to merge the two CSDs into a single securities platform

GhIPSS

A national interbank switching and processing system which connects GhIPSS with the switches of payment system participants for ATM, POS and Gh-Link e-commerce transactions Banks

PS

Participant System, located at each bank, used to prepare and deliver a ment instructions instructions to the Clearin House

e-zwich

Smart card payment system capable of offline and online transactions. GhIPSS Verification of cardholder is by biometric authentication.

Mobile money

Mobile phone is used as a payment device which enables elect ronic funds transfer and payment for goods and services with pre-loaded funds.

MMOs

The Bank of Ghana (BOG) Request for Proposal – Ghana Mobile Payment System

1.3

Objectives of the RFP

1.3.1

Tender content and process

This RFP is focused on the software, hardware and services required for the implementation of a Mobile Payment Systems Infrastructure (MPSI) as a turnkey project. The Tender for the implementation of the MPSI is by a Selective tendering. The Tenderer is required to perform the following: 









Overall integration of mobile payments platform of the MNOs in Ghana. Supply, installation, and integration of application software, hardware, infrastructure, operating systems, database and middleware supporting an operational MPSI pilot. Supply of software, hardware and implementation of a functional interoperable mobile money ecosystem. Integration with Ghana’s Ghana’s clearing clearing and settlement facilities consisting of CCC, ACH, RTGS, CSD and gh-Link.

Integration with the Participant Banks, Mobile Money Operators (MMOs), and the existing Front End Processors (FEPs).


Implementation services will be provided under a Contract to Supply and Implement the MPSI (“Contract”), under which the BOG grants the right to the successful tenderer to build, own and operate an interoperable MPSI for Ghana. The contract will include the following stages of delivery 1. Vendor mobilization period – period – maximum maximum of two months 2. System implementation – – maximum of six months to install hardware, software, and systems infrastructure 3. User Acceptance Test phase – – three month, extendable pending BOG and industry acceptance of the system. 4. Pilot Phase – – MPSI up and running with pilot banks, and new banks, entities, and functionality added as the project progresses. The duration should be six months.

1.3.2

Equipment and System Software

Tenderer proposals must explain the necessary hardware environment for successful operation of

the MPSI, setting out the hardware and software platforms that will support the system with exact configurations. Pricing for the configurations must be included in the tenderer’s tenderer’s Financial Proposal. The Technical Proposal must address both main and fall-back (disaster recover / business continuity) sites, including all hardware configurations, middleware and software; stating versions and models with part numbers and quantities. Equipment installed at the main site must include a testing environment as well as address any computing hardware needed by BOG as the regulator of MPSI to access the system in order to discharge effectively its oversight responsibilities. Tenderers must take into account all requirements for third party software (including database) licensing for main and fall-back sites. Network bandwidth requirements should be addressed in the architecture guided by the Tender er’s experience.

1.3.3 Application Software and Services The Tenderer must provide, as part of the project implementation, all the necessary application software and services to build the MPSI system; including comprehensive plans to configure, deliver and implement the MPSI software; as well as relevant training for the effective operation and support of the entire system under the supervision of the BOG. These tasks include: Services required for implementing the MPSI Coordination of implementation activities with BOG Payment System Oversight and Operations staff, GhIPSS with respect to payment systems operated by GhIPSS, participant Banks and technology suppliers supporting their switches and infrastructure, and Mobile Money Operators (MMOs).

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The Regular submission of project management report to the BOG, at least once a month, and more often, if requested by the BOG. Provision and management of a detailed Project Plan (documented using a standard project planning software tool), including description of tasks, roles, responsibilities and methodologies to be used, as well as interactions with the BOG team. A requirements analysis exercise with a formal report of localization requirements, special functionality required and any changes, configuration and customizations needed to be made to standard application sof tware tware (the “Initial Report”) Configuration or customization of the software to BOG’s BOG ’s requirements as stated in this RFP and the Initial Report. Installation of the application software on a test bed for system and integration testing Facilitation of the agreement of detailed standards and requirements for interface messages with BOG and other System Operators O perators Implementation of any necessary interfaces to BOG systems Connection of the central application(s) to the Participants Provision of test bed test plans and User Acceptance Test plans encompassing testing of all systems functionality. Provision of full documentation for the system, including User Manuals for System Administrators and Participant Users, Systems Maintenance Guide, configuration documentation, Technical Manuals, “As“As-Built” hardware documentation, draft System Rules and draft Participant Agreements Disaster recovery and business continuity plans Provision of comprehensive classroom training to BOG and Participant User staff on a “Train the Trainer” basis Provision of on the job training and knowledge transfer for BOG and Participant technical staff as needed Support of User Acceptance Testing managed by the BOG Support of the “go“go -live” process Support and maintenance of the Application Software for twelve (12) months a renewable period following an eighteen (18) months free warranty period on the total total system, through an Application Software Maintenance and Support Agreement concluded with BOG

1.3.4

Support and Maintenance

The Application Software Maintenance and Support Agreement, shall be negotiated during the implementation stage of the MPSI, and incorporate: a Service Level Agreement (SLA) which will include system performance as experienced by internal and external users; application software support, including any implementation work required to meet the on-going requirements of the SLA, and work required to ensure that the system continues to meet the functional and service level requirements and standards of the international payment networks despite increasing volumes or any functional enhancements. There shall be an initial twelve (12) months fee free maintenance period. During the one-year fee free maintenance period, the successful successful tenderer must also also commit to ensuring that all system system software components are maintained in up to date versions, fully licensed and supported and at the

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prices offered in the tender. This is to ensure that BOG, Banks, GhIPSS and MMOs are fully aware of their maintenance cost liabilities throughout the life of the MPSI.

1.4

Objectives of the Systems The key anticipated benefits of the MPSI are:

Establishment of an infrastructure to support interoperable mobile payments in Ghana that provides an interbank conduit and clearing and settlement of mobile payments among different issuers Provide assurance for financially and legally secure settlement of low value electronic payments, via the existing RTGS system for reliable, safe, and integrated payments and settlement system for all payment types Reduce dependence on cash and paper payment instruments, as a means of improving the security and operational efficiency of the overall payment system Reduce operational costs of processing payment transactions to Participants and also introduce new revenue streams through new payments products and services, such as mobile direct debit services, mobile direct credit service as well as electronic bill presentment and payment using mobile payment solutions Provide convenience, enhanced service offering greater range of services to bank customers and improving the speed of availability of funds to end-customers Facilitate integration of payments originating from core banking systems and third party transaction originators such as mobile money operators, internet payment gateways and payment aggregators. 8


Make Ghana attractive for trade and investment by providing, efficient, transparent, cost effective, safe and secure retail payment services l that conform to international standards.

Against the background of these generally targeted benefits, the MPSI must deliver the following specific benefits, which will support and complement the existing retail payment capabilities of GhIPSS, banks and third party service providers. All e-money issued in Ghana must be useable at all payment terminals in Ghana. In line with this, all Mobile Payment Systems in Ghana must be capable of interoperability and not be restricted to use by customers of one bank or one mobile network operator. Commercial Banks and Commercial bank customers should have the facility to effect “real “real time” funds transfer from one mobile bank account to another from any bank branch in Ghana to any other bank branch in Ghana either using a mobile handset, a POS terminal, an ATM, an Agent or an internet generated payment with subsequent clearing and settlement of transfers obligations on participant banks’ general ledger no later than three hours after completion of the original real time transaction. Government Ministries, Departments and Agencies (MDAs) will be able to initiate and receive payments electronically through their banks. These payments will be exchanged through the MPSI to any beneficiary, regardless of the bank or MMO they do business with or from any payer, notably for payroll instructions and disbursement of state pensions and social benefits, particularly in rural areas, leveraging the existing agent network of banks and MMOs to reach out to the unbanked with secure mechanism for payments in Ghana. Utility companies and other businesses will be able to initiate and receive payments electronically through their banks. These payments will be exchanged through the MPSI to banks to any payee or from any payer, notably for Direct Debit instructions and Mobile Direct Debits, thereby improving the timeliness and effectiveness of utilities payment collections for both public and private sectors. Reduce the risks in paper payment instrument such as cheque by substituting gradually electronic payments for cheque payments. Reduce the use of cash throughout the country, thus avoiding risks associated with cash movement and cash transactions.

1.4.2

Guiding principles

The BOG will play an active role in the mobile payments environment as regulator and overseer, settlement agent, and facilitator of innovation. BOG will, as part of its oversight responsibility; ensure the existence of rules and regulations governing the MPSI.

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The Bank of Ghana (BOG) Request for Proposal – Ghana Mobile Payment System

BOG as a central bank will not be a Pa rticipant in the MPSI. The rationale is to bolster confidence of the payments industry in the BOG as a neutral regulator and a nd overseer of the payment system. The BOG will promote the use of modern electronic retail payment services in Ghana with an overall objective of minimizing the use of cash and paper-based payment instruments. The development of the MPSI will follow similar principles to those of the other interbank payment systems. Each licensed bank which conducts retail payments business in Ghana will be required to participate in the MPSI system (directly or via third party processing agents) in order that full interoperability is maintained. Similarly, newly licensed banks intending to conduct retail payments business in Ghana will be required to participate in the t he MPSI system. The MPSI functionality and operations must conform to the Principles published by the Bank for International Settlements (BIS) in the “CPSS-IOSCO “CPSS-IOSCO Principles for Financial Market Infrastructures”, of April 2012. (See www.bis.org www.bis.org ) ) The MPSI must: Be able to support disaster recovery operations capable of ensuring business continuity in the event of serious disruption in the primary data center, disaster recovery facilities must be included as part of the bid in order to provide assurance for high levels of service availability. Be consistent with industry standard Open Systems conventions and interfaces which allow the system to be interfaced easily with other systems, and/or expanded by functional module or by capacity, and thus accommodate future changes in volumes and services. Provide for low cost and easily implemented technical connections for new user sites, including Bank Head Offices and branches, at either LAN or WAN level – which – which means a “non“non -intrusive” style of connection, not requiring major changes to existing bank systems and using accepted international format and protocol standards. Demonstrate high levels of reliability and trustworthiness with particular emphasis on data integrity and security by preventing unauthorized access so as to reduce the risk of transaction fraud. This includes use of PKI security methods, other suitable industry standard security methods and provision of full audit trails and associated reporting for all activities within the system.


1.4.3

Operational Risk Management

Participants will be expected to underwrite the settlement of their own MPSI positions. Positions should always be collateralized either by cash in RTGS or securities in CSD pledged in support of the settlement. Such securities should be capable o f immediate liquidation. The total of these collaterals constitutes constitutes a debit cap on the Participant’s ability to send payments. The debit cap may be set automatically by reference to collaterals held in BOG’s BOG ’s RTGS and/or CSD, as a guarantee in a failure to settle arrangement. The MPSI must have approval/authorisation options which can be used to input and modify standing data. Each data item manually entered must be subjected to dual control. Mechanisms must be be in place to handle “failure to settle” in in RTGS arising from Participants not having sufficient funds to settle their interbank obligations. Tenderers must explain their recommended approach to dealing with this issue. The clearing process must be transparent. Participants and BOG must be able to view transactions and positions in real time and at all times, with participants able to see only their own data. However, BOG as an oversight authority must have the privilege of seeing industry data. In view of this, the MPSI must provide comprehensive audit trail as well as monitoring and management tools for BOG, as overseer, to promote the efficiency and and safety of the system. system. Similar tools should should be made available to Participants to identify, assess and manage their liquidity needs in the system. There must be comprehensive session-based and end-of-day reporting sufficient to enable the System Operator to administer the systems and to supervise the activities of the Participants and MNOs in MPSI. MPSI Participants must be given same information to enable them manage their activities within the system.

1.5

Funding and Financial Proposals

The total cost of implementing the project and the cost of on-going support must be consistent with profitable operation at the volume of transactions to be processed and with reasonable assumptions about the acceptable level of fees in the Ghanaian market. This is to ensure that the system system is able to generate enough revenue to recover the operational cost and also recover the implementation costs within a reasonable period without hampering Ghana’s fi nancial inclusion agenda. Tenderers Tenderers for the “Supply , implement and Operate” Operate ” Contract must provide a financial proposal which must give a breakdown of hardware, hardware, system software, application software software costs to BOG, System Operator, Participants and any other parties for each application, indicating among others where infrastructure may be shared.

1.6 Evaluation Criteria

There will be a three (3) stage evaluation process namely; 1) Preliminary Examination Examination for Substantive Substantive Responsiveness; Responsiveness; 2) Technical Evaluation; and 3) Financial Evaluation. The Preliminary Examination will be conducted to ensure that the Tender is substantially responsive in terms of all mandatory tenderer and product and services eligibility requirements; and that the Tender meets all the conditions stipulated in the RFP for acceptance for detailed evaluation. A detailed technical evaluation will be undertaken for the tenders that are accepted for further evaluation after the Preliminary Examination. Only the technically qualified tenders (i.e. Tenders that receive a technical score of 80% or more will be shortlisted for financial evaluation. The basis for final ranking of the Tenders is Quality and Cost Based (QCB). And the weights given to the Technical and Financial Proposals shall be: Technical Proposal - 80% Financial Proposal – Proposal – 20% 20% Total Weight – 100% – 100% 1.6.1 Technical Evaluation Process

The Technical evaluation will be done on a total score of 100. The Technical Score Card is as follows: Evaluation Criteria: No.

Criterion

Max Points

1

Similar Project Experience

40

2

Quality of Methodology

20

3

Qualification Qualification and Experience Experience of proposed

10

Personnel

4

Quality of Design and Proposed Solution

30

Design  Components of Solution  Energy Efficiency Total

100

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Implementation of Ghana Retail Payment Systems Infrastructure

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