Cuscal is an Australian payments provider that is preparing clients and the industry for the New Payments Platform (NPP) launching in 2017. The NPP will enable real-time payments 24/7 with rich data, and new addressing options using mobile numbers and emails instead of BSB/account numbers. It will disrupt existing payments and ignite innovation through new overlay services like payment requests. Cuscal is a founding participant, has representation on all NPP working groups, and will connect clients directly to enable fast and reliable NPP payments for their customers.

1. Cuscal Limited, 2015
VIC/TAS INSIGHT SEMINAR 2015
THE FUTURE OF
PAYMENTS
Nathan Churchward, Cuscal

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. 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. 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?

5. Cuscal Limited, 2015
THE FORCES CHANGING
PAYMENTS IN AUSTRALIA
EXPLORING FOUR KEY TRENDS
PAGE 4

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. Cuscal Limited, 2015
TREND #1 Digital transformation in banking
MOBILE BANKING AND PAYMENTS COMBINED
6

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. 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. Cuscal Limited, 2015 9
Frequent payments: from cash to contactless to invisible

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. Cuscal Limited, 2015 11

13. Cuscal Limited, 2015 12
?

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. Cuscal Limited, 2015 14

16. Cuscal Limited, 2015
HOW THE NPP WILL
CHANGE PAYMENTS
PAGE 15

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. 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. 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. 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. 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. 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. 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. Cuscal Limited, 2015
HOW THE INDUSTRY IS
GETTING READY FOR NPP
PAGE 23

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. 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. 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. Cuscal Limited, 2015 THANK YOU. PAGE 27
GET IN TOUCH
Nathan Churchward
Product Development Manager
E: nchurchw@cuscal.com.au
T: twitter.com/cuscal
L: linkedin.com/company/cuscal