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.

"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.

"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)