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The future of payments in Australia - Cuscal


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Nathan Churchward, Cuscal's Senior Payments Product Manager, gave this presentation recently at an Insight event in Victoria.

It details current forces which are changing Australia's payments industry. It also includes a more detailed look at the New Payments Platform, including how it will work and the changes it will bring to the industry.

Published in: Economy & Finance

The future of payments in Australia - Cuscal

  1. 1. Cuscal Limited, 2015 VIC/TAS INSIGHT SEMINAR 2015 THE FUTURE OF PAYMENTS Nathan Churchward, Cuscal
  2. 2. Cuscal Limited, 2015 INTRODUCING CUSCAL 1 Our purpose To make payments easy, accessible and secure Our vision To be Australia’s payments leader: empowering our clients, as stakeholders in our platform, to achieve their goals
  3. 3. Cuscal Limited, 2015 CUSCAL BY THE NUMBERS 2 5.5 million cards under management >100 clients 1/3Australia’s ATMs 14%Australia’s EFT transactions 1stcommercial HCE launch 140 million Direct Entry and BPAY transactions p/a
  4. 4. Cuscal Limited, 2015 The forces changing payments in Australia PAGE 3 How the NPP will change payments How the industry is getting ready for NPP What’s next?
  6. 6. Cuscal Limited, 2015 Innovative new offers by competitors Increase revenues from innovative new offers and business models Margin compression Increased revenues from new products, distinctive digital sales and using data to cross-sell Lower operational costs from automation/digitalisation and transaction migration Increased operational risk TOTAL TOTAL Source: McKinsey analysis PAGE 5 TREND #1 Digital transformation in banking Potential threats Potential opportunities +5 +10 +30 +45 -13 -16 -6 -35
  7. 7. Cuscal Limited, 2015 TREND #1 Digital transformation in banking MOBILE BANKING AND PAYMENTS COMBINED 6
  8. 8. Cuscal Limited, 2015 PIN change Screen customisation and targeted messaging Enhanced deposit capability Cardless withdrawals TREND # 1 Digital transformation in banking DON’T DISCOUNT THE TRUSTY ATM 7 PIN change Screen customisation and targeted messaging Enhanced deposits for cash and cheques Cardless withdrawals Digital self-service and branch automation capabilities to improve customer experience while reducing service delivery costs
  9. 9. Cuscal Limited, 2015 TREND #2 Increasing volume of non-cash transactions Growth in debit cards shows positive use of bank account balance for digital purchases. Source: RBA’s 2014 report ‘The Changing Way We Pay’. PAGE 8 When their bank account can be accessed conveniently, customers are happy to use their own funds. Non-cash transactions per capita in Australia
  10. 10. Cuscal Limited, 2015 9 Frequent payments: from cash to contactless to invisible
  11. 11. Cuscal Limited, 2015 TREND #3 Disruption from fintech startups Up-and-coming fintech companies are playing a key role in reshaping payments Global Fintech financing has grown from less than $930 million for the whole of 2008 to over $1.04 billion in the month of October 2014 alone. Source: KPMG PAGE 10 Future Earnings Fintech financing activity Fin tech startups are building niche products that meet the needs of specific segments more effectively than the incumbents
  12. 12. Cuscal Limited, 2015 11
  13. 13. Cuscal Limited, 2015 12 ?
  14. 14. Cuscal Limited, 2015 Agile development enables banks to test and learn from their target markets They can respond quickly to changes in requirements It reduces the risk of launching products that don’t meet the needs of their target market PAGE 13 TREND #4 Major banks are using customer-centric approaches
  15. 15. Cuscal Limited, 2015 14
  16. 16. Cuscal Limited, 2015 HOW THE NPP WILL CHANGE PAYMENTS PAGE 15
  17. 17. Cuscal Limited, 2015 THE OPPORTUNITY The launch of the NPP in 2017 wil help the whole banking industry drive payments innovation PAGE 16 The launch of the NPP in 2017 will help the whole banking industry drive payments innovation Watch our animation which explains the NPP in simple terms
  18. 18. Cuscal Limited, 2015 PAGE 17 NEW PAYMENTS PLATFORM By the end of 2017 the NPP will support 24/7 payments, faster payments, more meaningful payments and simpler ways to pay FASTER PAYMENTS MORE INFORMATION ADDRESSING SERVICES OVERLAY SERVICES Payments in real-time, with close to immediate funds availability, 24 hours a day seven days a week Greatly increased amounts of data (up to 100kb/message) can be sent with payment information Payments can be initiated using mobile phone numbers, email addresses, or Australian Business Number (ABN) as opposed to BSB and Account Number Market driven tailored payment and data solutions to suit a range of consumer and business needs
  19. 19. Cuscal Limited, 2015 Use 24/7 Low value payments Rich data messages Addressing Service Real time settlement Individual transaction settlement Irrevocable funds Reconciliation Data NPP Direct Entry RTGS Cards BPay PAGE 18 THE NPP DISRUPTS EXISTING PAYMENT SERVICES A SPECTRUM OF BENEFITS FOR THE CUSTOMER, BUSINESS AND BANKS
  20. 20. Cuscal Limited, 2015 NEW, USER FRIENDLY WAYS TO MAKE PAYMENTS WITH A CENTRALISED ADDRESSING SERVICE 19 Mobile numbers Email addresses ABN/ACNs for Businesses BSB and Account
  21. 21. Cuscal Limited, 2015 NEW COMFORT THAT PAYMENTS HAVE BEEN SUCCESSFUL AND WILL BE RECOGNISED BY THE INTENDED PAYEE 20 Payee details confirmed in real time by addressing service Transactions that support up to 280 characters of data
  22. 22. Cuscal Limited, 2015 PAGE 21 INTRODUCING ‘PAYMENT REQUESTS’: A GAME CHANGING INNOVATION Sarah splits a restaurant bill with her friends Sarah requests payment from each friend using her bank’s mobile app Sarah confirms her friends’ details in real time as part of the request process Friends receive a request with amount due, in their bank’s mobile app With a couple of clicks, each friend authorises their payment Sarah receives the payments in her account immediately
  23. 23. Cuscal Limited, 2015 THE INITIAL OVERLAY SERVICE WILL IGNITE DEMAND ACROSS BANKS, BUSINESSES AND CONSUMERS 22 Request and Pay Person to Person payments Business or government payment with attachment Payments between consumers and Business or government
  24. 24. Cuscal Limited, 2015 HOW THE INDUSTRY IS GETTING READY FOR NPP PAGE 23
  25. 25. Cuscal Limited, 2015 Cuscal is one of the founding Participants which have invested in creating the NPP PAGE 24 BUILDING AUSTRALIA’S NEW PAYMENT PLATFORM
  26. 26. Cuscal Limited, 2015 NPP Australia Ltd sets the rules, runs the NPP, owned by the 12 founding Participants including Cuscal PAGE 25 NPP STRUCTURE Participant is a shareholder of NPP Australia and contributes to the design and establishment of the payment system Account Servicer – financial institutions that connect to a Participant to access the NPP and provide payment services to their account holders Customer – uses the payment services provided by their financial institution as either a payer or payee. Overlay Provider leverages the real time and data capabilities of NPP and establish standardised customer experiences across a range of financial institutions and their customers
  27. 27. Cuscal Limited, 2015 Cuscal will connect directly to the NPP – some participants will connect via agency arrangements offered by Cuscal. PAGE 26 CUSCAL IS PLAYING AN ACTIVE ROLE Craig Kennedy, Cuscal CEO, is on the board of NPP Australia Ltd. Cuscal has senior executive representation on all five NPP Working Groups, including those for Design, Testing and Operations. Our dedicated technical, product and marketing experts will ensure our clients are able to offer their customers fast, convenient and reliable payments around the clock.
  28. 28. Cuscal Limited, 2015 THANK YOU. PAGE 27 GET IN TOUCH Nathan Churchward Product Development Manager E: T: L: