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Interview with Kirill Lisitsyn, Founder and CEO at Torus.

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  • Kirill, Can you please give us an overview of the size of the global Card and POS market and about the cost for issuer and acquirer? 


According to the annual reports of Visa and Mastercard, they are processing about 15 trln EUR per year. And banks are paying them over 45 bln EUR in fees annually, which means almost 0.30 eurocents per each EUR of turnover. If we talk about specifically about issuers, we estimate their average costs of the fees by card schemes at 7-8 EUR per card per year. The tricky thing about these fees is that their structure is highly complex and moreover, it is changing several times per year which usually leads to growth of the total fees paid by the banks. 


  • In Torus you have strong expertise about the scheme fees structure. Do you think banks have a clear view on the card/pos economics for what concerns the relationships with the two biggest players, Visa and Mastercard? 


We at Torus believe that the payments market has a lot of inefficiencies caused by card schemes as rules-setting players and that banks and payment service providers could benefit from decreasing these inefficiencies. 


Based on our previous experience and over 20 interviews with banks and payment / merchant service providers, many of them have specific internal procedures to analyze the invoices by card schemes, but in most of the case these procedures require a lot of manual efforts which may lead to higher costs, lower efficiency as well as carry risks of human mistakes.  


  • In the Italian market, we experienced in many cases a big fragmentation in roles and responsibilities connected to cards and pos, which can be one of the reasons for this “unclear picture” on card schemes. What can be, in your experience, the necessary skills and the right team to better manage the revenues/cost of Card and POS? 


Indeed, we have seen the same picture in other markets in Europe and beyond. I believe that there should be a team of at least 2-3 payments professionals highly experienced in card schemes billing and operations and a clear bridge between P&L-keepers of cards issuing and merchant acquiring lines of business and their operations teams. And they should use a single source of data to provide a synchronized view on these costs allocation and efficiency control. 


The key issue here is that based on my previous consulting experience and what we have seen so far, these competencies cannot be easily found in the market. That is why many banks have a risk that in case of 1-2 leavers they may lose a critical portion of internal expertise and this in turn may lead to significant drop of the cost efficiency of banks’ transactional business. We have already seen several such case in the CEE markets.  


  • Can you explain to the audience what exactly is Torus, your value proposition for issuers and acquirers and the potential yearly average saving for card and pos? 


We offer a cloud-based analytics software which helps banks and payment service providers to manage their costs on cards schemes fees and optimize them by up to 20%. 


Utilizing the data already available in our customers, Torus provides a plug & play solution, which enables them to:  

(1) analyze their costs spent on card schemes fees in a more granular and simple way; 

(2) reconcile and forecast these costs; 

(3) unleash the potential for optimization.  


And our dedicated recommendation engine provides exact actions how to realize this potential. 


  • You are a young start-up but you already have a stable product and some customers in Russia and CEE. Can you explain to us a use case that you consider the most successful? 


I would say that selling to enterprise customers, especially banks is far not easy. So, we are proud that we are actively progressing with sales both in the market where we started, as well in new international markets. One of our most successful cases so far was is a three-year contract with an Eastern European subsidiary of a large international financial group. We started with a pilot for their issuing business, which delivered very good results and quite quickly was followed by a long-term contract. 


  • What was your rationale for entering Italian market? 


Italy was initially on our target list as one of the largest European markets. Also, we were invited to join “SaaS Italy” batch by Startup Wise Guys, a leading European B2B startups investor and accelerator, so this fact put even higher priority on the Italian market for us. 


  • Are there already other players offering credit card and POS cost structure optimization solutions?


We have not seen any similar solutions in Italian market. 

Our current biggest competitor is status quo, when banks either do not pay a lot of attention to card schemes fees-related costs, or use manual approach to fix some issues once and thus are not able to have a proper ongoing process to manage and improve efficiency of these costs.  

So far not all of our prospect customers realize that: 

  1. There is a material potential to improve cost efficiency of the card schemes fees and granularity of their understanding control. 
  1. Managing this cost efficiency is not about doing one exercise every 5 years, but rather having a regular (at least, monthly) process within the organization based on an automated tool. 
  1. Having their card schemes-related costs at an optimal level will not hurt their relations with the schemes and according incentive agreements  

 But we are working a lot on educating the payments market on the subject.


  • What is your next expansion ambition after Italy? 


For the last 2 months we became quite active in approaching banks and payment / merchant service providers in Europe with our first European contract being signed and few other promising leads from Luxembourg, Sweden and the UK. Also we are closely engaging with a partner in APAC region and look forward to getting first commercial discussions from this region soon. 

Supernovae Labs is a strategic consulting company focused on innovation and the first independent accelerator in Italy for FinTech startups. With its rich proprietary ecosystem of partners, it facilitates the matchmaking between financial institutions, fintechs and insurtechs, generating profitable business opportunities for all parties. 


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