RS Software – Will they pay investors too?

While we FOCUS on understanding and tracking the EFRM space better, here are other questions that we can seek answers to:

1. Vendor Registrations at Banks/FIs/FedNow/BoE: Any large BFSI opportunity seeks financial stability of the vendor as there is regulatory oversight and product/service requires support for many years. Has Financial criteria eligibility been an actual hindrance till now for RS? For contracts beyond a certain size, other than P&L, are there accumulated reserves/net worth norms too – basically graded eligibility norms, basis the size of contracts?

2. Partnerships might be a good way to move things forward till RS achieves/exceeds the desired norms. What is the focus within RSSL on this strategic objective. Is there a dedicated Team being set up for this? Strength and Budgets?

3. Collaborated with any of the large Indian Tech providers like TCS, Infy? CBS players like Infosys, TCS, CoForge, Intellect all claim to have some or the other insta payments solution, also say they are ISO20022 ready – are they natural Partners for RS, or are actually Competitors?

4. What percentage of revenues is RS looks to spend on sales and marketing in next few years?
   (For example, Newgen spends 25% of revenue on sales and marketing. Intellect Design Arena (IDA) spends 130 Cr on sales and marketing on revenues of 2500 Cr – around 5%). Current headcount in Sales and Marketing?

5. Senior level ex-employees of target financial institutions are often onboarded by BFSI vendors – like say what Intellect Design has followed, which has opened significant doors for them. RS strategy on similar hirings?

6. RS had two wins for its Acceptance platform in North America. Both of these have been product licence sales in partnership with TSG. Are these deals an Annuity kind of business? How is a deal size arrived at? What is the revenue cycle in terms of licence sale/deployment expenses/AMC etc.? Is deal size a function of bank size?

7. Current understanding is that ISO 20022 standard compliance for SWIFT cross-border payments is necessary by 2025. Is that understanding correct? Also every country might have their own internal guidelines/timelines for domestic ISO 20022 compliance but for cross border payments the mandatory fields like Purpose, structured origin/destination address, and LEI (Legal Entity Identifier) have a definite timeline to comply with? Despite being THE Opportunity in payments modernisation space globally for next 2 years and also highlighted strongly by RS in 2024 Annual Report multiple times – why NOT a focus area?

8. FedNow and the related ecosystem seems like such a large opportunity. Apart from TCH (which is mentioned by RS) what is the participation in FedNow, and any other RTP Infra opportunities? Will RS be working on FedNow Technology Service Provider registration?

9. FedNow seems to have lower MDR rates than MasterCard/Visa etc. and it motivates merchants to develop payments over FedNow. This opens a large opportunity with merchants with a sales process not as difficult as large banks. How is RS pursuing these opportunities more vigorously?

10. Why has RS not focused on the BBPS Switch market in India – given that retail users are used to paying charges (1-2%) for making bill payments? Given RS reputation, it should have a decent opportunity to crack some revenue sharing deals in this space. What are the issues which are hindering in capturing these opportunities?

11. GoI Budgetary support for UPI incentives and promotion of digital data in 2021 was at 1300Cr, went up to 3500Cr in 2023 before going down progressively to 1441 Cr currently. P2M per transaction support has come down from Rs. 0.97 in 2021 to Rs 0.15 in 2023 looks like. Is this data roughly right? How does this impact the revenue models/viability of vendors that were getting a share of these budgetary support back from the Banks.

12. RS has often talked about/presented on the $800 Bn global opportunity in payments modernisation by 2027/2028, but given RS set of unique challenges/circumstances how does it define the size of the REAL addressable market, and what are RS ambitions for a reasonable market share in that in 3-5 years?