For achieving sustained success in the global card payments market, transparency, and optimization are now the essential foundations.
At the forefront of addressing these needs is Torus, a pioneering SaaS intelligence platform founded by Kirill Lisitsyn, now CEO.
Through innovative solutions to empower banks and fintech, Torus is redefining how these institutions manage and optimize scheme fees, ultimately boosting profitability.
From Consultancy to Innovation
Kirill Lisitsyn’s journey to founding Torus is rooted in over a decade of consultancy experience with banks and financial services companies, including a significant tenure at Mastercard. It was during this period that Lisitsyn and his co-founder identified a glaring gap in the market. Banks were increasingly dissatisfied with the opacity surrounding data transparency and the myriad fees charged by the scheme.
I spent about 12 years working in consulting for banks and financial services companies, 5 years of which I spent at Mastercard. I met my co-founder there, and we saw that banks were far not happy with the transparency of data they were receiving from the schemes like Mastercard and Visa, especially when it came to the tons of different fees charged by the schemes.
Recognizing this as a significant opportunity, they set out to develop a product that would address these global challenges, and thus, Torus was born.
Addressing a Critical Market Gap
The creation of Torus was inspired by the rapidly expanding yet increasingly crowded card payments market. While this market continues to grow at a double-digit pace annually, margins are under pressure due to intense competition and rising costs, particularly those related to scheme fees. Many market players perceive these fees as a ‘black box,’ exacerbated by legacy systems, frequent pricing changes by schemes, and a general lack of expertise.
“On the one hand, the global card payments market keeps booming growing double-digit per annum, but on the other hand, this space became quite crowded. Card payment margins are under pressure, as many players start competing by price, at the same time the costs are constantly growing, especially the ones related to the scheme fees” Lisitsyn explains.
Torus was developed to fill this void. “To succeed in this market banks and fintechs have to be competitive yet profitable and this requires a very tight and deep control over their P&L items. So, Torus was built to empower banks and fintechs to close this gap by better analysing and optimising the scheme fees, managing unti-level transactional profitability and optimising product pricing” he highlights.
Cyprus: A Strategic Base
Part of Torus’s team operates out of Cyprus, engaging actively with local payments players. While there were initial considerations to relocate junior team members to Cyprus, the cost implications proved prohibitive for the early-stage startup.
Despite this, Torus has successfully tapped into the local fintech ecosystem, securing customers, partners, and investors through the Cyprus community. The company’s active participation in key industry events, such as the Forbes Cyprus The Future of Fintech Summit and the Reflect Festival, underscores its commitment to contributing to and growing within this ecosystem.
Driving Profitability for Payment Providers
Torus operates by capturing the original data that banks and fintechs receive from schemes, processing and analysing this data, and then visualising the results through interactive dashboards. The platform also feeds enriched data back to customers.
With a robust set of built-in use cases, Torus enables clients to understand and optimise scheme fees, predict transaction-level P&L, and identify potential profitability leaks. In essence, Torus helps banks and payment providers enhance their understanding of scheme fees, optimise costs, and balance pricing to eliminate transactional losses.
Standing Out in a Competitive Landscape
Torus’s laser-focus on a specific yet global niche sets it apart from other SaaS intelligence platforms in the payment industry. Its primary competition comes from banks’ in-house development teams. Historically, Torus has focused on the mid-market, where there is a greater openness to adopting SaaS solutions over internal development, particularly for specialised areas like scheme fee optimisation.
The Future of Cashless Payments
Looking ahead, the cashless payments industry is poised for significant evolution. Lisitsyn envisions continued growth for both local payment schemes and alternative payment methods, alongside a persistent potential for cash payment substitution.
“We see the growth of both local payment schemes as well as alternative payment methods, but there’s still large potential to substitute cash payments, so that’s why we expect card payments to keep on growing fast, which will secure the leading positions of big names like Visa and Mastercard in this market. Also, historically they both used to be quite good at adopting competitive changes rather than fighting them, and we see this partially happening now with open banking and crypto payments in some certain markets”.
The company is well-positioned within this landscape, with opportunities to expand its solution coverage to include alternative payment methods and to cater to the growing demand for pricing transparency from orchestration platforms and merchants.
As Lisitsyn explains, “For Torus this means that on the one hand, there will be a growing market for our current solution and on the other hand we could expand the coverage by adding alternative payment methods into it. Besides that, we see growing interest for pricing transparency from the players down the payments value chain such as orchestration platforms and merchants, which are now inheriting from the banks the issues caused by cumbersome and evolving structure of scheme fees and interchange”.
Key Milestones and Achievements
Since its inception, Torus has achieved several significant milestones. In just 2.5 years, the company has onboarded ten customers across the EU, the UK, and Asia, including Japan.
Torus’s SaaS platform has enabled customers to save substantial amounts on scheme fees and improve profitability by 15-50%. Recognition from industry leaders, such as an invitation from Mastercard to join their Lighthouse program and being awarded “Startup of the Year” by the Merchant Payments Ecosystem conference in Berlin, further underscores Torus’s impact and potential.
“And there is more exciting news coming soon. Stay tuned!” Lisitsyn highlights.
Overcoming Challenges and Looking Ahead
The journey to making the cashless payments industry more data-driven has not been without challenges. From overcoming customer reluctance to delve into profitability analysis to addressing bureaucratic and technical issues, Torus has navigated these hurdles by showcasing real-life impact examples and developing robust data monitoring controls.
“On a high level, sometimes we see that banks are just comfortable in not going deeper with the profitability analysis, so we had to bring in some real-life examples of how managing this area better could impact the business P&L. If mentioning hands-on challenges, then a few times we have faced bureaucratic issues from the customer side to share the data with us, even even though Torus solution consumes with anonymized data only and in batch mode, as well as uses industry best practices for processing and storing the data,” he explains.
Lisitsyn adds, “Sometimes we also meet technical issues on the customer side to consistently provide the needed data daily. To address this issue, we have developed an extensive set of data monitoring controls and dashboards, so that both the Torus support team and the customer can track online the outcomes of the data exchange and reveal any issues on time”
Moving forward, Torus is focused on continuous sales and product development, with plans to unveil new predictive features at the Money2020 conference in Amsterdam. Leveraging its success in Cyprus, the company aims to expand into neighbouring markets like Greece, further solidifying its presence and impact.
Advice for Aspiring Fintech Entrepreneurs
Drawing from his experiences with Torus, Lisitsyn offers valuable advice for aspiring fintech entrepreneurs:
Believe strongly in what you are building, keep constantly pushing towards results, be prepared for ups and downs, and find intermediate metrics to judge your progress. Most importantly, be open and honest with your team – they are the most valuable asset you have.
In an industry where transparency and optimisation are paramount, Torus stands out as a beacon of innovation, driving significant improvements in the profitability and efficiency of banks and fintechs worldwide.
