Fintech in Atlanta #6 - Interview with Ali Raza, Senior Vice President of FSS
How have prepaid cards evolved and what does the future look like?Prepaid cards have gone mainstream – both GPR and gift cards. There are over 400 million Visa, Mastercard, and Discover branded prepaid cards - and growing at double - digit rates. As you know earlier, the prepaid card was essentially a payroll card, or a product for unbanked consumers, or those ineligible for credit cards. Today, we have prepaid cards for multiple consumer and business segments. They are finding new applications and uses every day. While payroll, unbanked, and gift cards remain important, there are cards in healthcare, gaming, business incentives, refunds / rewards, and business expenses too. In addition, new fintech firms and startups have done a remarkable job by innovating around prepaid cards. We now have cards for teenagers, for early pay access, as well as for ‘just in time’ payments. Additionally, we are starting to see a blurring of the lines between debit and prepaid cards, particularly with digital banks, neo banks, and challenger banks. This will continue to be a strong growth driver.
In essence we are seeing prepaid cards become a conduit for funds delivery as well as a funds access device. They are an important component of digital commerce. Moving forward, we will see more innovation around tokenization, virtual cards, push payments and mobile. The business sector is relatively untapped, and cross-border payments have some interesting opportunities. We don’t see the core need around unbanked and underserved going away any time soon. If anything, prepaid cards have an important role to play in improving financial inclusion and financial wellness – not just in the US, but globally.
What are the big issues, opportunities, and challenges in payments?Payments is big business and the digitization of payments is a huge growth and revenue opportunity. In many ways the established, entrenched, and highly efficient payments order in the US has held back development and innovation. The EMV card is a good example where the US has lagged behind the rest of the world. But, this is changing - and changing rapidly. There is a tremendous amount of VC money flowing into the payments sector and startups are proving to be highly disruptive. Incumbent legacy players are bulking up to gain additional scale - note the three mega payments M&A deals this year. Banks in general remain on the sidelines of payments having ceded control to third-party providers many years ago. Big tech remains an open question and their data advantage, brand, and deep pockets represent a formidable threat. Faster payments will prove to be a big impetus particularly for business payments, card networks, and merchant settlements. Security, authentication, identity, and data privacy continue to be major industry concerns.
Could you tell me more about the role FSS is playing in the prepaid card
As a global paytech, we deliver value in the areas of electronic payments and digital commerce. We provide innovative technology solutions, state-of-the-art infrastructure, and 25-year expertise in the payments industry. As one of the largest independent payment processors in Asia, we power prepaid and debit card operations for 25+ financial institutions and provide support for 800 million cards. We have a robust, agile, and highly functional prepaid and debit card issuing platform that manages the complete lifecycle of cards enabling banks and issuers manage their portfolio efficiently. Our system supports front-end account and card origination transaction processing, back-end settlement and reporting. Our goal is to enable banks and card issuers to launch, grow, and scale their business – to that end we offer high levels of functionality that support both open-loop and closed-loop card programs, virtual cards, multi-purse and multi-currency cards.
From a technology standpoint, Microservices and Open API’s are big advances – and FSS is accelerating developments to improve speed-to-market of its solutions. We are making our products open and RESTful API-driven enabling banks and fintech companies to rapidly build new and innovative market focused programs. The implementation of CI/CD has been the key to speed to market. Continuous development is a primary tenet of the company, and we are working on the continuous deployment model with SaaS models. This takes an edge over the traditional models.
Can you provide some examples of how FSS is working in the prepaid sector?In the US, we have been working with one of the top prepaid and gift card issuers for several years supporting their technology platform and enabling their growth and development. In South Africa, we are supporting a large state-owned enterprise to manage grants transfer to low-income populations segments. In India we developed a prepaid wallet for the largest bank in the country and a multi-currency prepaid product for another leading bank.
In one of our largest card conversion projects for a large Asian Bank, we successfully migrated the data of 200 million cardholders without disrupting any customer facing operations. And recently we have moved into the transit sector and are working with one of the largest mass transit networks that handles upwards of eight billion people a year.
Additionally, we have developed payroll and expense cards for providers in the Middle East and implemented end-to-end issuance technology for leading traditional and challenger banks.
We have also been recognized for our innovative products and solutions and won many prestigious awards at various banking and payments industry forums in Asia.
What are FSS’ future plans? Why did you choose Atlanta as one of your U.S.
We are actively expanding in international markets – Asia Pacific, Africa, Europe, and North America. We’ve had a US presence for a number of years with offices both in Atlanta and Houston. Given our strategic focus on international markets we are expanding our presence in Atlanta – we like Atlanta (and Georgia) for a number of reasons – a strong payments industry ecosystem, a burgeoning startup fintech sector, and a business-friendly climate. Not to mention Hartsfield Jackson, “the world’s busiest airport” that helps with proximity to major cities in the US and internationally.
We are looking forward to enabling financial institutions and payments providers and processors in the US with innovative technology products, solutions, and services allowing them to serve their end customers better. We are having some interesting discussions with a number of established players as well as young companies about our card issuing and merchant acquiring products as well as authentication, and back-office solutions and services. The payments industry in the US (and globally) is undergoing massive transformation and we are excited to be playing a key role in that transition.
FSS (Financial Software and Systems) is a leading global digital payment and financial technology company offering an integrated portfolio of software payments products, hosted payments services and software payments solutions. FSS comes with three decades of expertise in banking and digital payments, as the most trusted, flexible and agile payments solutions pay-tech company, servicing leading banks and large digital payments clients globally. FSS integrated payment products suite powers retail delivery channels including ATM, POS, Internet and Mobile as well as critical back-end functions including cards management, reconciliation, settlement, merchant management and device monitoring. Headquartered in Chennai, India, FSS services leading global banks, financial institutions, processors, central regulators and governments across North America Europe, Middle East, Africa and APAC and has 2,500 experts on-board.
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