In 2021, RS2 Software PLC's Board says it expects the Group to reap the benefits on the investments it has made in previous years.
The Company also says that “despite the world economic crisis and the challenges brought about by COVID-19, the year 2020 has been a year where significant revenue contracts have been entered into.”
In its announcement via the Malta Stock Exchange, RS2 explained how it was able to mitigate the damages of the “Great Lockdown,” saying that its “agile management culture leveraged by a technology-based culture and preparedness” enabled the company “to seamlessly switch over to home productivity with minimal disruption.”
In response to the pandemic, it triggered its Business Continuity Plan to continue providing its services, it said, “with no impact or interruption to business.”
RS2 highlights that it has retained fiscal stability during the period, and “is sufficiently liquid to ensure it can meet all its obligations as and when they fall due in order to continue the implementation of its strategy.”
Despite the payments market facing challenges such as those posed by increased competition and regulatory initiatives, the Company says that “[the market] remains one of the brightest spots in the financial services industry.”
Indeed, according to RS2, these challenges will benefit the industry in the long term. Because of them, “payment companies began to invest heavily in their infrastructure in order to play a more active role in the digitalisation of the whole customer journey.”
The Company believes that these factors, in combination with a favourable economic environment will spark a breakout in the industry; “it is expected that the payment market will increasingly accelerate over the next decade and those companies which have the right strategy, executed by a strong management team, together with sufficient funding, will benefit from these trends.”
It acknowledges that whilst the payments market has been negatively impacted by COVID in the short-term, it has “proved to be resilient and reliable”.
Indeed, RS2 suggests that in the long run, the COVID pandemic might act as a catalyst for the proliferation of card payments globally, “with the right triggers in place from governments, retailers and consumers.”
Among developments made during 2020, the Company says they have “concluded major processing outsourcing agreements with various payment providers such as Independent Sales Organisations (ISOs) and Payment Facilitators (PayFacs)” and “signed on one of the largest banks in the United States on a hybrid licensing and processing model, which will take revenue generation for the Group to a new level.”
“Through the Group’s recent investments in quality relationships with new premium clients, RS2 reported an increase in the volume of transactions processed on its platform during 2020 when compared to those processed in 2019,” it reveals.
During 2020, RS2 says it has “continued to invest in human resources to support the framework of its new acquiring business line in conjunction with the process undertaken to obtain its financial licence through BaFin, the German financial regulator.”
In the immediate future, the Group will continue to “concentrate on implementing and delivering its strategy around its main business pillars of growing and expanding the managed services business, ramping up the US expansion and building its own direct acquiring business.”
Furthermore, RS2 continues to enhance its platform globally in order to on-board more businesses which target large financial institutions, Independent Software Vendors (ISVs), PayFacs and merchants from various industries globally.
By way of an extraordinary resolution of the shareholders taken on 15 December 2019, the Company has increased its authorised share capital, its authorised ordinary share capital, and created a new class of 60,000,000 preference shares of €0.06 each.
These measures will “enable the planned growth, including, any necessary enhancement of the Group’s BankWORKS® platform, further investment in North America and in the new acquiring business line, expanding the sales force to the various lines of businesses and selected M&A activities,” according to the board.
Whilst the Board says it “recognises the prevailing volatile economic environment and the risk of unforeseen events impacting the Group going forward,” it maintains an optimistic outlook for 2021, “expecting the Group to reap the benefits on the investments it has made in previous years and to show markable top-line growth and improved profitability in the years to come.”
The full report can be accessed here.
