Why penny testing is gaining popularity in transaction banking
Penny testing in transaction banking

Written by Tom Rijks

Published on 29 September 2022

Why Penny Testing is gaining popularity in transaction banking

Penny testing, sometimes called smoke testing or small value testing, has stepped into the limelight regarding quality assurance in transaction banking. So why is this classic concept gaining popularity, specifically in transaction banking?

What is penny testing?

A penny is a coin that represents 1/240 of the pound sterling and has an actual monetary value. However, this value is so low that it has minimal risk. This makes the penny an excellent tool to use for testing production systems.

Penny tests verify if a transaction journey works from a payer and beneficiary perspective. A real payment is made, with real money, paying real invoices. This ensures the same route works when sending in more transactions and/or more significant amounts.

Some examples to illustrate:

  • Merchants sell an online product to themselves for 1 cent to test if the PSP services work.
  • The employer sends in 1 cent transaction to see if the amount is credited to the employee.
  • A bank asks its friendly customer to send in a transaction to test new functionality in production.

The underlying assumption is that if it works with one penny, it will also work with larger amounts.

Journeys come together for the first time in production

Complexity in transaction journeys is increasing. Changes to production systems are ongoing. Customers demand 24×7 availability. Banks find themselves with a significant challenge: How to assure end-to-end service delivery and performance with transaction journeys that come together for the first time in production?  

Inside-out methods do not seem to solve this challenge anymore. End-to-end quality assurance using FAT-UAT-Production setups has become too complex and expensive to maintain. As a result, many banks have abandoned the idea of having an exact copy of their end-to-end production environment.

Verification is testing in production 

So, what if banks were able to test the end-to-end transaction experience in the actual production environment? They would not need to test the entire journey in UAT or pre-prod. Thus also not maintaining an expensive copy of the production setup.

However, verifying if the solution works in production is mandatory to avoid incidents with customer impact. Timing these verifications smartly enables banks to identify and fix incidents before customers notice. And if banks cannot get them fixed, they can inform your customers proactively.

Penny testing as default in quality assurance

This is where penny testing becomes of value. As said, penny tests verify if a transaction journey works from both a payer and beneficiary perspective. Suppose you can set up and execute penny tests quickly and cost-efficiently. In that case, this is an effective means to assure the quality of service delivery.

With the complexity and diversity of payment value chains increasing in the digital age, banks embrace penny testing as a default mechanism to assure quality.

 

 

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