the future of payments in australia - cuscal
TRANSCRIPT
Cuscal Limited, 2015
VIC/TAS INSIGHT SEMINAR 2015
THE FUTURE OF PAYMENTS Nathan Churchward, Cuscal
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
Cuscal Limited, 2015
CUSCAL BY THE NUMBERS
2
5.5 million
cards under
management
>100 clients
1/3 Australia’s
ATMs 14% Australia’s EFT
transactions
1st commercial HCE launch
140 million Direct Entry and BPAY transactions p/a
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?
Cuscal Limited, 2015
THE FORCES CHANGING PAYMENTS IN AUSTRALIA
EXPLORING FOUR KEY TRENDS
PAGE 4
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
Cuscal Limited, 2015
TREND #1 Digital transformation in banking
MOBILE BANKING AND PAYMENTS COMBINED
6
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
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
Cuscal Limited, 2015 9
Frequent payments: from cash to contactless to invisible
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
Cuscal Limited, 2015 11
Cuscal Limited, 2015 12
?
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
Cuscal Limited, 2015 14
Cuscal Limited, 2015
HOW THE NPP WILL CHANGE PAYMENTS
PAGE 15
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
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
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
Cuscal Limited, 2015
NEW, USER FRIENDLY WAYS TO MAKE PAYMENTS WITH A CENTRALISED ADDRESSING SERVICE
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Mobile numbers
Email addresses
ABN/ACNs for
Businesses
BSB and Account
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
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
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
Cuscal Limited, 2015
HOW THE INDUSTRY IS GETTING READY FOR NPP
PAGE 23
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
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
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.
Cuscal Limited, 2015 THANK YOU. PAGE 27
GET IN TOUCH
Nathan Churchward Product Development Manager
T: twitter.com/cuscal
L: linkedin.com/company/cuscal