The document discusses the challenges of the current infrastructure for payments and proposes a new centralized real-time payment platform as a solution. It notes that the proliferation of different payment types and channels has led to complexity across multiple platforms that strains resources. A centralized real-time payment platform could simplify the architecture, reduce costs through shared services and multilateral netting, and support all customer channels with the same experience for any payment value or type. This new platform would provide instantaneous payments that are final for all parties without reconciliation.

1. Overcoming Infrastructure Challenges Preparing for the future Martin Kearsley Director of Strategy

2. About VocaLink At the forefront of innovation 19:00 Leaving restaurant, top-up mobile (by ATM mobile phone top-up ) 14:00 Check balance and pay bills online (by OneVu ) 17:30 Leave work. Withdraw cash for night out (by ATM ) 15:25 Gas bill and life insurance paid (by Direct Debit ) 10:00 Salary paid in (by Direct Credit ) 12:30 Check your statement on your mobile (by MONILINK ) 20:30 Remember nephew’s birthday – transfer £50 via Faster Payments 18:00 Funds transferred to savings account (by Standing Order )

3. Environment of innovation and change Over time we have built a plethora of different payment types all more complex to meet our customers’ needs Cash was the original real-time payment

4. Multiple platforms drives complexity Each payment type, lives on a separate platform Placing valuable IT resources under intolerable pressure Less resource available to drive new business

5. Complexity multipliers Platform diversity brings inefficiency Operational silos grow as complexity increases Agility and flexibility are increasingly elusive

6. Proliferating channels Mobile Internet banking ATM POS Telephone banking We have trained our customers to use multiple channels These channels bring their own complexities Increasingly mobile customers continue to expect more

7. Real-Time: fit with current payment types Customer Customer Channel Cash Credit transfer Direct debit High value Retail cards E-Information Bank Single settlement (per currency) ATM infrastructure Automated payments infrastructure High value infrastructure PoS infrastructure ATM inter-bank infrastructure Automated payments inter-bank infrastructure High value inter-bank infrastructure PoS inter-bank infrastructure Inter-bank Settlement agent PoS Single bank infrastructure Single inter-bank infrastructure Instrument settlement settlement settlement settlement Convergence Convergence

8. Multiple propositions one payments backbone Customer Channel Cash Credit transfer Direct debit High value Retail cards E-Information Bank Inter-bank Settlement agent PoS Single settlement (per currency) Central Real- Time Platform Customer Instrument Bank switch reflects central platform switch design Single bank infrastructure Single inter-bank infrastructure Convergence Convergence

10. Any channel but same experience: Internet, mobile, ATM , “cards” plus new channels Valid anywhere Highly secure: bank centric Any value Widely accepted Integrated with day-to-day transactions Final for all parties No reconciliation required The future payment experience The same…only different Instantaneous Enhanced experience

11. A final thought “ We are continually faced with a series of great opportunities brilliantly disguised as insoluble problems.” John W. Gardner