HSBC Bank is to consolidate its retail and wholesale payments processing worldwide on Fundtech's Global PayPlus platform. News of the deal comes as the vendor provides guidance for 18-21% revenue growth over 2005 and calls for higher profits.
The implementation of the Fundtech platform is expected to deliver improved service and significant savings in operating costs to HSBC through the replacement of multiple payment systems currently in use throughout the group.
Bandula Wijesinghe, SVP, who heads up the payments transformation programme at HSBC, says: "We chose Fundtech because they have a comprehensive and flexible payments product based on modern technologies."
The vendor says the contract demonstrates the opportunities at the top end of the market for suppliers who can accommodate the demands of the biggest banks. News of the deal comes as Fundtech projects fourth-quarter 2004 revenues of $17 million and EPS of 10 to 12 cents, in line with previous guidance.
Looking ahead, the New Jersey-based vendor is foreasting 2005 revenues in the range of $68 million to $70 million, or approximately 18% to 21% year-over-year growth.
Reuven Ben Menachem, Fundtech's chief executive officer, says he is confident the firm will meet its targets: "In addition to the impact of the HSBC transaction, we are continuing to expand our relationships with existing customers, including our largest customer Citibank, we are starting to generate meaningful revenues from our securities industry initiative and we expect our recently acquired subsidiary, CashTech of Pune India, to make a positive contribution in 2005."
First half profitability is likely to be impacted by the costs of hiring and training new staff as the vendor scales up to meet the backlog in demand, says Yoram Bibring, Fundtech's chief financial officer.