Complex, tedious and expensive – these are just some of the adjectives used to describe financial clearing and settlement of roaming transactions – and aptly so. Mobile network operators typically have to manage financial clearing and settlement across multiple roaming agreements, produce and collate multiple invoices, and all while complying with GSM rules and regulations. Not only does this demand in-house expertise and experience, but it also requires high levels of manpower, time and cash flow to process numerous invoices, reconcile accounts, and more. Furthermore, the more roaming partners an operator has, the more complex this process becomes because it has to settle with each partner individually (bilaterally). It’s no wonder MNOs feel a great need for effective and reliable Financial Clearing Houses (FCHs) to whom they can outsource their financial clearing and settlement processes.
Outsourcing these processes to a solutions provider like MACH has multiple benefits – the provider helps simplify the bilateral settlement process, improve cash flow, reduce the operator’s exposure to bad debt and handle all the necessary GSM compliances. It’s no surprise then that more than 300 of the world’s MNOs have turned to MACH for financial clearing and settlement support, giving MACH more than 60% of the outsourced financial settlement market.
With this size customer base, the largest in the industry, MACH is able to uniquely operate its Multilateral Settlement Pool (MLSP), which takes the simplification one step further by introducing the concept of multilateral settlement, instead of bilateral settlement. Bilateral netting reduces credit risk by offsetting payable and receivable amounts whereas multilateral reduces credit risk and settlement risk by settling all payables and receivables on the same day. This means that each member of the MLSP settles only with MACH, instead of all of their partners separately. As a result, 60,000 invoices are now reduced to just 300, which means each member receives only one payable or receivable per month. This process greatly reduces the cash flow required by mobile operators to settle with their roaming partners.