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When a vision becomes reality
Set up in 1989, RS2 Software Group develops card payment
solutions for banks. CEO Reinhold Schaffter spoke to David Kelleher
about the company role in the banking sector and future plans
What could ever prompt a vice- president at American Express
International Banking Corporation to leave his job and seek
pastures new? A better job? A lucrative salary? Maybe. Reinhold
Schaffter, however, had other things on his mind. He had a vision
– a vision that few of his peers probably believed would
ever become a reality, let alone succeed.
Yet, Mr Schaffter knew exactly what he was doing when he made
the move in 1984 to become an independent IT consultant for
international banks in the Middle East. This move allowed him
to start working on his vision.
Five years later, that vision suddenly became something real
in the form of a company that he co-founded in 1989 – RS2
Software Group. Starting off as a two-man company, RS2 has grown
enormously over the past 11 years. Today, the company has since
developed a worldwide presence, including regional offices,
support centres, and sales representatives in several countries.
“I left the bank to pursue a new business based on PC banking
networks, something that not many thought was viable in those
days. My vision was to develop a PC product that could be used
by small to medium-sized bank and that would enable them to
enter the card transaction business,” Mr Schaffter told
The Malta Business Weekly.
“We ended up in Malta quite by chance. A meeting was held
in 1998 for Master and Eurocard members and it was here that
a local bank showed interest in one of our products. At the
time we were only two people in the company and we realised
that to provide a service and customer support we had to have
a presence here,” he explained.
A successful business deal with the local bank was to set the
ball rolling for further success. Ninety-nine per cent of RS2’s
business is export-oriented with a few clients here in Malta.
“Our main business is abroad, especially in central and
eastern Europe,” he said. “As orders for our banking
products started coming in, we had to expand and so now we have
a presence in those regions where most of our business is,”
Mr Schaffter explained.
The globally-oriented organisation is led by a highly experienced
business team and staffed by highly qualified, multi-national
IT specialists. Twenty-five of the 30 local staff members are
Maltese, including the group’s general manager and technical
director.
The group currently supports a client base of international
and domestic banks, service providers, retailers and other financial
organisations located in western, central and eastern Europe,
the Middle East, Asia, Russia, central and south America. It
has established long-term relationships with customers in over
30 countries around the world.
“The Malta offices have been the group’s software
development centre since inception and all of RS2’s software
products are developed locally,” he said.
The group’s turnover is around 10m euro per year and the
com-pany has grown by 30 per cent over the past few years.
RS2’s main market has been the small- to medium-sized banks
who do not have the infrastructure that big, multinationals
might have but still want to be able to offer card payment systems
to their clients. The company’s products are available
in various modules, giving clients a much wider choice depending
on their particular needs.
“The group is focused on being one of the leading edge
companies within new technology and new business areas. The
group develops software solutions for smart cards, electronic
commerce, mobile commerce and internet card banking, based on
open architecture information technology, adaptable to suit
a client’s particular needs,” Mr Schaffter said.
The group has also taken stock of the impact of the Internet
on the banking system, however Mr Schaffter feels that the impact
is not as great as many may perceive it to be. Yet, this has
not preven-
ted RS2 from developing modules specifically offering internet
transaction capabilities to clients.
“Although this is available, not all clients have opted
for this module,” he explained.
RS2 Software Group has business partnerships with Visa International,
Europay International, and Oracle, and counts several major
organisations among its associates – IBM, Kobil Systems,
and Control Commerce Inc., a New York-based internet company
offering advanced e-commerce services in the US and Europe.
“At present the software we are offering allow banks to
process up to 500,000 transactions a day. However, we are actively
working on new software that will allow us to target greater
volumes and therefore the possibility to target other markets.
The high-volume version will be capable of processing that same
number each hour, meeting the demands of the larger banking
institutions,” Mr Schaffter said.
Mr Schaffter believes that the card business can only grow even
more than it has over the past few years. With developments
in central and eastern Europe, he sees a growth of around 35
per cent worldwide in the card business. Good news for RS2.
“We have a good share of the market, however we are not
content with what we have and will be seeking other niche markets,”
he explained.
The company is also exploring the use of a virtual shop front
that is totally controlled by the merchant however the infrastructure
will be held by the bank. Thus, the merchant will only be responsible
for updating the website when he needs to.
“This is a new development and is not yet available on
the market. We will soon start a pilot installation in Denmark,”
Mr Schaffter said.
Another technology area being studied by RS2 is the use of chip
technology. This is a new form of card which uses a microchip
rather than a magnetic strip. Not only is it more secure and
a guarantee against fraud, but such a systems opens numerous
possibilities. For example, you can use a credit card with a
chip to go shopping, operate the barrier at the car park and
effect banking transactions.
“This is a new industry that is slowly developing and the
major card companies are still discussing formats and standards.
The primary objective here is the security of transactions,
an issue that everyone agrees upon. We are giving this technology
a lot of importance and in fact we are also partners with VISA
in this area,” Mr Schaffter explained.
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