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FSS Expands in EU to Set Up a Transaction Processing Centre in US

FSS is looking at two strategies for the US market

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FSS has recently bagged an order from QRails Inc for its 3DS 2.0 solution enabling frictionless payment. Pixabay

Targeting 50 per cent of its turnover from overseas operations, payments technology and transaction processing major Financial Software and Systems (FSS) is expanding its European operations by venturing into Netherlands, a top company official said.

FSS Managing Director (MD) Nagaraj Mylandla told IANS here that the company is also planning to set up a transaction processing centre in the US.

“In the last fiscal our revenue was Rs 1,100 crore with a split of 80 per cent domestic and 20 per cent overseas. In the next two years we expect the domestic:overseas ratio to be 60:40,” he said.

According to Mylandla, FSS is looking at two strategies for the US market – either buy into an existing transaction processing player or set up its own infrastructure ground up.

FSS, EU, Transaction Processing Centre
Payments technology and transaction processing major Financial Software and Systems (FSS) is expanding its European operations. Flickr

“Talks are on and nothing has been finalised. The investment outlay will be about $20 million,” he said.

The FSS has set up its own processing centre in Dubai a month ago at an outlay of $5 million and a similar amount will be invested there soon, he added.

According to executives, the company is replicating its India business model in the overseas markets.

“The FSS has two revenue streams. The first one is from managing and running the automatic teller machines (ATM) for several banks in India. The second revenue stream is the retail software business wherein we sell people process and the software at customer side,” FSS Global Business Head Ram Chari told IANS.

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Queried about the expansion in Europe, Chari said: “We are trying to push our software and solutions capability with a two pronged approach – one, work with large tier-1 banks and processors to help them modernise legacy technology. Two, partner with new age fintech companies and payment processors who are entering the market to offer financial products.”

They pointed to the demand for new age banking with European banks raising the bar and experimenting with artificial intelligence (AI) enabled functionality such as chat bots and predictive learning.

According to Chari, there is demand for enhanced security with the Second Payment Services Directive (PSD2) as part of the European Commission’s efforts to create a safer, more innovative payments environment in Europe.

Chari said FSS has recently bagged an order from QRails Inc for its 3DS 2.0 solution enabling frictionless payments and four more customers have been added in Europe.

FSS, EU, Transaction Processing Centre
The company is also planning to set up a transaction processing centre in the US. Pixabay

“We see Europe as a market for some interesting opportunities in the fintech adoption front. Digitisation, shifting consumer preferences and regulatory reforms continue to fuel Europe’s importance as an influencer in the development of payments,” Chari noted.

Speaking about FSS’ operations in Africa where the company has acquired 46 per cent stake in the Standard Bank subsidiary Ecentric Payment Systems, Chari said: “We are also seeing much engagement with the Standard Bank there after this investment.”

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“In Congo, we are at the advanced stage of implementing a faster payment hub which enables both Peer-to-Peer (P2P) and national level connectivity within banks to do multiple payments.”

There is a huge interest in payment gateways in the Middle East and some new sets of customers in Saudi Arabia, Chari added. (IANS)

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US Sanctions on Cuba Deterring American Firms from Exploring Its Telecommunications Sector

It remains unclear how open it would be to U.S. investment in the strategic telecoms sector

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US, Cuba, American Firms
FILE - Cubans check their phones at an internet hotspot in Havana, Cuba, Aug. 10, 2018. VOA

U.S. sanctions on Cuba are deterring American firms from exploring its telecommunications sector even as Washington seeks to expand internet access on the Communist-run island, according to the final report of a U.S. government task force released on Tuesday.

Chinese companies dominate Cuba’s telecoms sector, a status quo “worth challenging given concerns that the Cuban government potentially obtains its censorship equipment from Chinese Internet infrastructure providers,” the report said.

Cuba’s government protested the U.S. State Department’s creation of a Cuba Internet Task Force last year as “foreign interference.” It remains unclear how open it would be to U.S. investment in the strategic telecoms sector.

“U.S. companies informed the subcommittees they are often deterred from entering the market due to uncertainty caused by frequent changes to U.S. regulations concerning Cuba,” according to the task force, convened last year by the State Department.

US, Cuba, American Firms
U.S. sanctions on Cuba are deterring American firms from exploring its telecommunications sector. Pixabay

U.S. presidents have successively tightened and loosened the decades-old U.S. trade embargo on Cuba imposed in the years after its 1959 revolution.

Former President Barack Obama created a loophole for U.S. telecommunications companies to provide certain services to Cuba. His successor, Donald Trump, maintained the loophole but tightened the broader sanctions, worsening the overall business climate.

Banks are increasingly reluctant to process payments originating in Cuba. Some telecoms firms surveyed by the task force said that was putting them off offering key services and products in the country.

The task force advised the U.S. government to clear up the regulatory uncertainty and seek feedback on how to improve telecoms firms’ ability to invest.

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Until 2013, the internet was largely available to the public in Cuba only at tourist hotels amid the U.S. embargo, lack of cash and concerns over the free flow of information.

The government has increased web access in recent years, installing a fiber-optic cable to Venezuela and introducing cyber cafes, Wi-Fi hot spots and mobile internet.

Cuban telecoms monopoly ETECSA signed a deal earlier this year with Alphabet’s Google on increasing connectivity, but the two have not publicly agreed on any significant investments. (VOA)