If we are to drive digital adoption, growth will come from MSMEs: FSS

FSS (Financial Software and Systems), a global digital payment and financial technology company, has augmented its UPI 2.0 platform.

Aanchal Ghatak
New Update

Financial Software and Systems (FSS) is a  payments technology and transaction processing company. They offer an integrated portfolio of software products, hosted payment services and software solutions built over 29+ years of experience.


FSS offers 'Payments in a Box', -- a comprehensive portfolio of end-to-end hosted payment services backed by leading-edge technology solutions, state-of-the-art infrastructure, industry best practices and skilled domain experts. FSS acts as a strategic partner and provides comprehensive payment services to banks.

Here, Sandeep Gomes, Global Head, Acquiring Processing Business (FSS), has more to say. Excerpts from an interview:



DQ: How is fintech going to drive India’s vision to be self-reliant?

Sandeep Gomes: The Government, as a part of the Atmanirbhar India campaign, has announced a comprehensive financial stimulus package for reviving economic growth, with specific focus on micro, small and medium enterprises (MSMEs).

India fintech is among the top 10 fintech industries in the world, and the economic package serves as an accelerator for innovation and the introduction of new business propositions targeted at new market segments.


Fintech companies are leveraging these developments to pivot their business models and change their focus from consumer payments to enabling banks, small merchants, and other payment intermediaries to go digital.

There is enormous scope for LendTech, InsureTech and RegTech companies, as well as digital enablement companies providing online payment acceptance, contactless payments, card-less alternate payment mechanisms such as UPI and Aadhaar-based payments, as well as omni-channel digital banking solutions.

DQ: Why is it important to prioritize MSMEs to drive the country’s economic growth?


Sandeep Gomes: MSMEs contribute to more than more than 30% of the National GDP - 6% of manufacturing GDP and almost 25% from service activities. With the MSME Ministry planning to increase this contribution to 50% by 2025, India understands the importance of this sector.

To quote another statistic, with more than 63M MSMEs in the country, of which more than 99% are Micro SMEs, which have the annual turnover of INR 5 crores, the opportunity is there for all of us to see. Now, match this to the 5M payment acceptance points and we see how big the gap is! If we are to drive digital adoption, this growth will come from the MSME segment.

When we talk about self-reliance, and the MSME’s are perfect examples of “Atmanirbhar”. The digital inclusion of MSMEs is crucial for the important role they play in supporting economic growth, innovation, employment and reducing informality. Our recent offering FSS Embark is a step towards complementing efforts by the Government of India to strengthen the MSME segment by bringing them into the digital economy and providing them the same payment tools as large enterprises to improve reach and competitiveness.


DQ: How can MSMEs benefit through technology?

Sandeep Gomes: The majority of micro, small, and medium enterprises (MSMEs), do not use electronic payments and are excluded from the digital economy. In the current pandemic, consumers are increasingly making purchases online. For instance, a recent study of Indian consumers found that 49 per cent of Indian consumers are planning to make more purchases online. So, it has become critical for MSMEs to adapt and cater to these shifts in transactional behaviours.

Access to low-cost digital payment acceptance tools would help to improve sales, expand customer base and to gain access to new markets at lower costs.  Several industry reports, for instance, indicate that consumers spend more when they use a digital payment instrument rather than cash.


Further, most MSMEs report an average 12%. increase in sales after they start to accept digital payments. MSMEs also benefit from automated reconciliation, lower transaction disputes and improved business efficiency.

Crucially, digital payment acceptance also functions as a gateway to other services such as access to credit. The transactional data can help credit constrained MSMEs who lack access to traditional collateral to build a credit profile and gain access to institutional sources of credit.

DQ: How is FSS’s ‘Acquirer in a Box’ helping stakeholders such as banks, aggregators and MSMEs bridge the gap?


Sandeep Gomes: The FSS Embark upturns the traditional acquiring business from a high-value-low volume model geared towards large enterprises, to a low-value-high volume model focused on micro-merchants.

Given the characteristic heterogeneity and the fragmented nature of the MSME landscape, no single player can go it alone. They need the help of partners that bring complementary capabilities that can be a source of innovation and growth.

With Embark, FSS is orchestrating an ecosystem that brings banks and merchant acquirers together onto the same platform to address the needs of MSMEs for cost-efficient digital payment acceptance tools. Banks benefit from wider reach and low-cost acquiring model whilst merchant acquirers benefit from a capital light technology model and a single-entry point to manage integrations with multiple banks. This will allow ecosystem participants to access new markets, access new customers and increase revenues.