RS Software - Will they pay investors too?

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Questions for AGM on 10th July 2024

Hi Everyone

Example of another solid collaboration exercise.

Let’s try and get answers from RS Software Management in a structured way. Anyone who gets an Opportunity to ask questions at the AGM, please pick a few from here. Also looking forward to add more questions to this list. Request active Collaboration from all interested/tracking/invested.
[for the moment, let’s keep aside the past experiences and be open to asking the right questions :slight_smile: ]

  1. 46% of global real time payments processed on platforms built exclusively by RS Software - is a claim made by RSSL in some of the official videos. Is this taking into account only UPI? What other platforms if any, are we referring to here.

  2. The outsourced services for VISA’s card platform. Please help us understand the genesis of that seemingly very strong relationship. Apart from RS core competence validation, what were the contributing factors - How was respect for Visa’s IP validated by them for that kind of trust to be built up.

  3. Why did RSSL win the initial UPI Tender? As many as 70 plus Vendors had probably responded for the RFI/RFP included global biggies in payments domain like FICO, FIS, ACI, Nice Actimise. What were the contributing factors for that win against what one could term as overwhelming odds?

  4. Is it fair to say IntelliEdge EFRM is RSSL core strength, and the one single product that uniquely differentiates and benchmarks you as among the best in the world? Please take us through that journey right from the initial days with VISA on Risk and Fraud Management.

  5. Apart from meeting high availability and scalability requirements, The UPI experience has obviously bolstered product IP. How much richer has Data Stream Analytics incrementally grown - from rules based predictive patterns learning base to AI and deep machine learning enabled detection of fraud on real time transaction basis. What did UPI experience add to the product/IP

  6. Please talk about your Sales Process/Consultative Selling? Go-to-Market partnerships needed to Target customers at Large Banks/FIs and Fintechs in export markets like US, Canada, UK and Europe. Vendor registration must be a regulatory requirement of Central Banks also (just like RBI’s) so that they can intervene when needed or question sustainability of individual vendors. Do you have vendor registrations with small/large Banks and FIs in these markets already? When talks proceed to an advanced stage with customers, do they help expedite the registration process?

Or, the way forward is go-to-market partnerships with the right Partners in each country/region?

  1. Please talk about a few of these partnerships in US, Canada, UK, Europe. Are these the Accentures of the world and/or more payments domain focused consulting firms. Why cant TCS, Infosys and other Indian IT majors - who probably already have all the required vendor registrations, be your natural go-to-market partners for Banks/FIs in every market?

  2. UPI Tenders mandate the sharing the Source Code. How are they maintained securely.?

  3. In the Initial years till the 2023 next version of UPI, RSSL owned the IP rights, while Data was owned always by NPCI. Now IP is co-shared with NPCI. What are the implications for this? Does it mean NPCI is free to choose to develop this further in-house and/or go with other vendors as they choose.

  4. Current share of licensed product sale vs Solutions Sales is 60:40? Can you please elaborate more on the product licensing terms. How are these structured? Are there multi-year licenses or perennial? Has it become a mandatory requirement for Sales to any Central Bank/Central Infrastructure to a Country (like NPCI in India) for vendors to give away the source Code? Does the IP also need to be shared? What has been the experience so far.

  5. Is it a correct inference that other than Central Bank/Central Infrastructure Sales - the Product License IP rights are always owned ONLY by RSSL? No shared IP Sales?

  6. just for our understanding - Is it a fair argument that Revenue Share deals are primarily seen for products that are at the Edge/Overlays. Products at the Core of Central Infrastructure are unlikely to see such deals.

  7. Recent PayAbbhi deals in the US are revenue sharing deals right? Please tell us more on how exciting that opportunity is for RSSL. An idea of what kind of scale up is possible (as more merchants are acquired on the platform) would be great to have. Why is 5x or 10x in a few years not possible?

  8. Is it correct to say that the singular market driver for Real Time Payments (RTP) and the consequent payment modernisation acceleration seen in recent times - is the Customer Expectation/Demand. Kindly comment on this and if this is now an irreversible trend.

  9. While UPI is hugely successful and traffic is already at 13 Bn transactions annually, the one argument often made about UPI success and huge scale up seen is that nobody is making money. There are no MDR charges, Maintenance/Enhancement of central Infra is limited, and capped. And at edge solutions/gateways/aggregators nobody is making any money. Is it now CLEAR that the user will never be charged. But in future it might move to a system where high value transactions for Merchants are charged a much smaller transaction charge compatred to current and/or some kind of capped service fee is attached - for sustainability reasons

  10. At the same time evolving regulations are also hastening the process? SWIFT the de-facto money transfer network for cross-border payments is making it mandatory for all participant banks to adopt ISO20022 messaging compliance for cross-border payments by November 2025. Australia is in compliance already, US and UK efforts are on at FedNow, and BoE. Does it point to RS Software Central Infra and Banks/FI targeted products have a huge opportunity knocking at the door? 2024 AR is full of ISO20022 compliance reference for most product suites.

  11. AR 2024 refers to TCH-RTP, FedNow, PayPal and Zelle integration ready products like DigitalEdge. These are Networks having their own set of participating banks. We have been talking of FedNow deployments. Is it fair to assume that wherever RSSL has gained a foot-in-the-door, multiple opportunities at participating banks are addressable for central payment rail connector, payment hub solutions as well as legacy-RTP overlay products/solutions. How strong is the Sales/Marketing effort therein? If at this point/size of RSS partnerships are the way to go, what kind of Team have we built for Partner engagement/focus.

  12. Please help us put a dimension to this opportunity. We hear that all Big Banks have earmarked huge budgets for this transition. RBS or NatWest Group’s ISO20022 budget is 100 Mn Pounds. This will of course involve huge amounts of legacy connects/overlays but what portion of this budget say is RSSL Addressable Market here. Of the $340Bn (RSSL presentation) opportunity by 2027, how much is imminent by 2025, and RS addresable size?

  13. We hear ISO20022 message structure makes 3 fields mandatory now for SWIFT cross border. Purpose, Structured Address (conforming to the country banks set fields), and Legal Entity Identifier (LEI). While there are many other fields that make for much richer payment data set, what are the main problems that are being addresed, and what are the opportunities for Banks and FIs that adopt ISO20022 even for domestic payments.

  14. UPI Tender Scans (filtering out hardware/servers, computers et al) shows up a few companies like Montran (ACI company?) - mainly around NACH clearing ( total 42 Cr), ⁠Phi Commerce - RuPay Clearing and RuPay EFT switch, EMV 3D secure with IP ownership but source code to NPCI (total 21 Cr), FIS - AMC EFT switch (IRGS) Rupay domestic settlement (total 12 Cr); also IISC Prof hired for AI/ML. Of these RSSL clearly has the Clearing and Settlement Solution, why did RSSL not bid/get this piece too?

  15. Can you please talk about RS Open Payment Modernisation Framework (RS OPMF) as described in 2024 AR? What does this Architecture Framework bring to the table additionally. Does this help RSSL differentiate its Product Offerings from say that of biggies like FICO, ACI, or FIS? Does it help accelerate Customer solution deployments, why and how?

(will try adding more later with inputs from more VP Collaborators)

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