In this article, we look at why a functioning global payments system matters, and talk to Mr Mohamed Horani, CEO of HPS, about how his company is meeting the challenge.
Globalisation has been a term that has been with us for a long time. But what does it mean in the practical world of business and financial transactions?
HPS might have some answers. Founded in 1995, HPS is an innovation-driven payment solution and services company dedicated to solving the financial transaction problems posed by the increasing mobility of goods, services and people.
We invited Mr Mohamed Horani, CEO of HPS, to talk to us about how their company is gearing up to meet the challenges ahead.
What does HPS do and why do global payments systems matter in today’s global economy?
Since 1995, HPS has provided financial institutions, payments providers and merchants across the world with cutting-edge payments technology that transcend the entire payments value chain.
The system allows them to innovate rapidly and bring new products to market with ease and efficiency using HPS’s PowerCARD software – increasingly seen as the future of the payments industry. The PowerCARD suite is fully integrated with all international payment networks and supports all primary back-office payments functions.
In today’s interconnected and digital world, global payments systems matter because they are the arteries of the global economy, enabling businesses to trade with others across the globe, and consumers to purchase goods and services online and offline with ease and efficiency.
At the same time, in an increasingly turbulent and unpredictable world, payment systems help to support financial stability and expand financial inclusion in the developing world, which is crucial to eradicating extreme poverty and boosting the share of economic prosperity.
How are current trends in the global economy impacting your business? What are the main challenges over the next few years, in your opinion?
The digitisation of the global economy is the most significant phenomenon impacting our business today, leading to trends such as:
- The emergence of the sharing economy – The digital revolution has led to the creation and proliferation of sharing platforms, such as Airbnb, TaskRabbit, LendingClub and ridesharing apps, creating some challenges for merchants. Customers need to trust that payments for these services are efficient.
- The cashless society – Over the last few years, the number of cards in circulation and users of mobile payments has skyrocketed, with even stronger growth predicted over the coming years. 80% of payments in countries like Sweden and Denmark are already cashless.
- Payments: A market in full reconfiguration – Thanks to digitisation, consumers are more connected, better informed and more demanding. As a result, they now want faster, easier to use and less expensive financial services.
For years, banks, restricted by legacy payment systems, have been slow to respond to this demand, leading to an influx of new FinTech companies who have the necessary agility and competitiveness to deploy innovative and digital business models to help meet this need. Some banks have responded by buying into FinTech or setting up incubation programmes or implemented open APIs for other market actors.
- Electronic payment and “Blockchain” technology – Blockchain, the technology of the moment, represents the promise of adding trust in non-secure environments and permitting a transparent access to information contained in the chain.
According to Gartner, by 2020 blockchain-based cryptocurrencies will account for $1 billion of value in the banking industry – small, but effectively legitimising this currency.
In the spirit of following the trend, we have already initiated the migration of a PowerCARD module towards this technology, which is the interbank transactions clearing and settlement module.
- Rapidly evolving and changing cybersecurity challenge – With the rise of the internet, cybersecurity has become one of the biggest, and changing, challenges facing financial institutions today.
On a daily basis, financial institutions are being targeted by hackers who are using highly sophisticated techniques and tactics.
To overcome the challenge of cybercrime, financial institutions are having to implement the latest technologies that can handle a range of highly sensitive data, keeping it safe and secure at all times.
All of these trends are having a significant impact on our business, industry and lives, and will continue to do so for the foreseeable future. To adapt to this new reality, we have developed a range of new modules for the PowerCARD suite, including HPS Security and a blockchain-enabled PowerCARD module. The new additions will allow us to help our clients to future-proof and evolve their payment systems to deliver the fast, convenient and secure payments consumers are now demanding.
Are you expanding as a business, both geographically and in the development of new technologies?
As a business, we have expanded significantly in terms of geographic reach, the development of new technologies and collaborative projects. Every year we invest 12% of our annual revenue in R&D, which has allowed us to stay ahead of the innovation curve and keep our clients at the forefront of the payments industry. For example, over the last year we have:
- Developed an open API system, PowerCARD Connect Open API, recently launched in beta, that allows FinTech firms to create new solutions on the HPS PowerCARD network;
- Deployed nexo standards across the entire PowerCARD suite, representing a fundamental shift to enabling fast, interoperable and borderless payments acceptance, and lighting the way for other FinTech forerunners to follow;
- Initiated the migration of a PowerCARD module towards blockchain, which could potentially provide a more secure, transparent, tracible and quicker way of transmitting payments within the existing financial ecosystem, by cutting out the middleman.
- Started working on the next era of mobile technologies and developing P2P payments solutions, which are taking off across North Africa
In September 2017, HPS’ global footprint grew with the opening of the Asia office in Singapore. Looking forward to 2018, HPS will continue to expand its geographical footprint with the addition of a US office.
Tell me about your new offices in Singapore and the US. Why do you need them and what’s their role?
We opened our Singapore office in September 2017 to help support HPS’ rapid growth within Asia and forge closer working relations and new ones within the region. The decision to expand HPS’ presence into Singapore was a logical one in its business strategy, as the area represents rich and diverse growth opportunities and HPS will increase its ability to service current and future markets.
The US office opening will also be a significant moment for HPS, as it will represent HPS’ first physical footprint in the Americas. As in Asia, the Americas is undergoing a rapid technological change, driven by new mobile, online, social technologies and digitally savvy consumers.
We have already worked with a number of clients within the region to evolve and adapt to this rapidly changing landscape, and our US office will help us to further support them on this voyage and forge new relationships within the region.
What are your plans for the next ten years?
We have elaborated a new HPS strategy that we hope to achieve by 2025.
Our ambition is to accelerate our development and consolidate our position as world leader in the providing of payment solutions. And we’re well on the way to achieving it. The future looks exciting!
