Australia's New Payments Platform will launch in 2017, allowing real time payments between individuals, companies and different tiers of government. Cuscal, alongside the Reserve Bank of Australia and the major banks, is one of the organisations that is currently designing how this vital new infrastructure will function.

1. NEW PAYMENTS PLATFORM
DISRUPTING THE
PAYMENTS MODEL

2. AGENDA
How payments are changing in Australia
PAGE 1
How the NPP will impact payments
How Cuscal can position you for the NPP

3. HOW PAYMENTS ARE
CHANGING IN AUSTRALIA
EXPLORING THE FOUR TRENDS
PAGE 2

4. 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/digitalization
and transaction migration
Increased
operational risk
TOTAL TOTAL
Source: McKinsey analysis PAGE 3
TREND #1 Digital transformation in banking
Potential threats Potential opportunities
+5
+10
+30
+45
-13
-16
-6
-35
Digital innovation in retail banking offers potential threats and opportunities.
Up to 35% of net profit eroded for digital laggards. Over 40% of net profit upside for winners.

5. 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 4
When their bank account can
be accessed conveniently,
customers are happy to use
their own funds.
Non-cash transactions per capita in Australia

6. 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 5
Future Earnings
Fintech financing activity
Fin tech startups are building
niche products that meet the
needs of specific segments
more effectively than the
incumbents

7. 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 6
TREND #4
Major banks are using
customer-centric approaches

8. HOW THE NPP WILL
IMPACT PAYMENTS
PAGE 7

9. THE IMPACT
During these times of change
the launch of the NPP in 2017
will support the
banking industry.
PAGE 8

10. PAGE 9
THE IMPACT
 Each transaction settled individually,
in real-time, between participating
financial institutions
 Will support additional transactional data
 Easily extended to enhance user
experiences for consumers and businesses
Australia’s NPP will raise the bar:

11. PAGE 10
NEW PAYMENTS PLATFORM
By the end of 2017 the NPP will offer: 24/7 payments, faster payments, an
addressing service and the first overlay service (the Initial Convenience Service)
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 solutions

12. Open
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 11
THE NPP DISRUPTS EXISTING
PAYMENTS PRODUCTS
A SPECTRUM OF BENEFITS FOR THE
CUSTOMER, BUSINESS AND BANKS

13. PAGE 12
INTRODUCING ‘PAYMENT REQUESTS’
A GAME CHANGING PAYMENT TYPE
Sarah splits a
restaurant bill
with her friends
Sarah requests
payment from
each friend
Sarah confirms her friends’
identities in real time,
requests an amount from
each, and by when
Friends receive request
with amount, due date,
and deposit details
After a couple of
clicks from each
friend
Sarah receives the
payments immediately

14. HOW CUSCAL CAN POSITION
YOU FOR THE NPP
PAGE 13

15. The founding Participants which
have invested in building the NPP
PAGE 14
OUR ROLE

16. Cuscal will connect
directly to the NPP –
some participants will
connect via agency
arrangement.
PAGE 15
OUR ROLE
Craig Kennedy,
Cuscal CEO, is on
the board of NPP
Australia Ltd.
Cuscal has
senior executive
representation on
all 5 NPP Working
Groups.
Our dedicated technical,
product and marketing
experts will ensure
clients are able to offer
their customers
immediate, convenient
and assured payments
around the clock.

17. NPP Australia Ltd
sets the rules, runs
the NPP, owned by
the 12 founding
members including
Cuscal
PAGE 16
NPP STRUCTURE
Participant is a
shareholder and
contributes to the design:
 Full Participant (Cuscal)
connects directly
 Other Participants will
connect via Full Participants
Account Servicer –
needs Participant to
connect them to the NPP
and may offer additional
services to customers.
Customer – procures
services from
Participants, Users and
Overlay Providers as
either a payer or payee.
Overlay Provider leverages the real
time and data capabilities of NPP and
establish standardised customer
experiences for transaction processing

18. Reserve
Bank
6
Other NPP
Participant
or their client
PAGE 17
WE CONNECT
1 Payer from Cuscal’s
client sends payment
2 Address Lookup
3 Clearing Request
4 Clearing Response
5 Settlement Request
6 Settlement Notification
Cuscal’s
Client
Other NPP
Participant
3
4
6
1
NPP
Basic
Infrastructure
and Addressing
Service
2
5

19. PAGE 18
WE CONNECT
Other NPP
Participants
Core
Banking
System
Basic
Infrastructure ?
Web Service
Proprietary
Trust Model
Swift Trust Model
ISO 20022

20. THANK YOU. PAGE 19
REQUEST FOR MORE INFORMATION
If you have any questions about
Cuscal’s NPP Services, please email:
npp@cuscal.com.au