Virtual assistants are changing the way people shop, bank and interact with businesses. From chatbots to voice assistants, businesses and their customers are seeing the benefits of automating and simplifying transactions and interactions.
Learn more about voice assistants and other innovations driving change in payments around the world in the Global Payments Innovation Playbook which we produced in collaboration with PYMNTS.
We have been thrilled by the reaction to the recent article which broke the news about the New Payments Platform (NPP) collaboration between Cuscal and Assembly Payments. We’ve both been fielding lots of enquiries from companies keen to emulate Carsales and so we thought we’d write this article to tell you a bit more about how the collaboration works and the best way to bring the benefits of real-time payments to your customers.
We think the NPP is a fantastic opportunity for any e-commerce company that is sending large amounts of money around or just needs to move money fast. Whether this is large volumes of transactions (or just large transactions) the benefits are clear – immediate, verified payments with detailed descriptions will enhance customer experience and minimise enquiries.
What is the NPP and how do you connect?
The NPP is the new, decentralised payments infrastructure which allows participating financial institutions (including Cuscal and the RBA) to move money between each other in seconds, 24/7. To become part of the infrastructure (a ‘Participant’) is a lengthy, complex process and you are required to be an Authorised Deposit-taking Institution (as it’s a regulated environment and requires access to RBA settlement facilities). However, most companies don’t need to do this. They can get the same benefits, more cheaply and easily by connecting to one of the Participants.
What levels of connection and capability are there?
The second official level of connection to the NPP is called an ‘Identified Institution’. The collaboration between Cuscal and Assembly Payments is big news because Assembly is the first company that is NOT a financial institution to be officially recognised as an Identified Institution. This means Assembly can register and create PayIDs for others and offer NPP services to its own customers, like Carsales.
Complicated? It doesn’t have to be.
While the background, and some of the terms, are a bit complicated, actually using the NPP is getting easier. Most companies will connect through APIs. The New Payments Platform has recently published its API framework which enables third parties to get a greater understanding of the platform and what it can do, using a sample API Sandbox.
Each NPP Participant will support their own APIs based on the NPP API Framework. Cuscal has already released REST APIs, which is how Assembly accesses NPP and Osko services to move money in real-time between Cuscal and other financial institutions.
Using the NPP is even quicker and easier for those companies that don’t need to become an NPP Identified Institution but want the benefits that come with NPP and Osko payments. For example, Carsales is enabled for NPP services through the Assembly platform.
Which path is right for you?
It depends on what you want to do.
If you’re confused as to which path is right for you, just get in touch with either one of us and we’ll steer you in the right direction!
By Nathan Churchward, Cuscal and Simon Lee, Assembly Payments
We recently held our inaugural client conference ‘Curious Thinkers’ where local and international experts presented on the topics that are front of mind in the payments space. My key take out from the Conference was that now, more than ever, it is essential for financial services organisations to clearly understand their customers’ expectations. They then need to be able to respond quickly to those expectations while managing an increasingly complex compliance and regulatory environment.
Here are some other learnings which may help navigate the current landscape:
The importance of picking the right partners
Collaboration and partnering are essential to succeed in the current market. Leda Glyptis’s thoughts on partnership resonated with me. Leda highlighted the options available to financial institutions in this age of digital disruption and greater open-ness. I loved Leda’s tips on picking the right partner and which partners to avoid at all costs:
Fraud prevention for the future
Nuno Sebastiao, the global CEO of our fraud partner Feedzai, outlined the capabilities of the Feedzai platform, including machine learning and AI. Nuno and his team’s presentations during the day reinforced our decision to roll out the Feedzai fraud solution. It is a best-in-class fraud monitoring tool that provides us and our clients with a holistic, and highly granular, view of each end customer. The ability to intimately know someone’s spending patterns, and so detect when something is out of character, will be crucial in preventing future fraud.
The role of regulators in a time of change
“Change is not new, of course… But what is unsettling for today’s financial institutions is the sheer pace of change.” Wayne Byres provided a timely and useful perspective on the challenges facing regulators and financial services companies today. In particular, he highlighted:
On the way to open banking
Scott Farrell, the Chair of the Australian Government’s Review into Open Banking, reminded us of the principles behind Open Banking: “to give customers more control over their data leading to more choice in banking and more convenience in managing their money.” Whilst many are concentrating on the compliance requirements that sit with open banking, we are really focussed on how we can enable some real growth opportunities for our clients in an open banking environment.
The ‘youthquake’ is coming – we’d better be ready.
Rocky Scopelliti outlined how the millennial generation views work, banking and the digital world. Two points which struck me in particular were:
Innovation is over-used, but under-utilised.
We all talk about how important ‘innovation’ is, but if we’re honest, most of us don’t back up our words very well with concrete action. Charlotte Rush gave us practical, simple and scientifically validated methods to cultivate innovation. To turn this into action we then had a group ideation session on how to collaborate better to enable a seamless customer experience, from Cuscal to client to customer. We will be taking the best of these ideas forward in the year ahead.
Real-time payments have ramped up.
Now that all the major banks are live we’ve seen a 40% jump in New Payments Platform (NPP) transaction numbers between July and August. Adrian Lovney outlined the NPPA’s priorities for the coming years, including an expansion in reach, volume and capability. The ‘consent and mandate’ service will be particularly exciting. It will make direct debits simpler and more transparent, removing one of the major obstacles to account switching. It will also allow services like Osko’s ‘Request to Pay’ and pave the way for open banking. We will bring these innovations to our clients and their customers as quickly as possible.
How to lead in the digital age.
Stephen Scheeler emphasised how important it is for business leaders to understand the fundamentals of digital. If we fail to understand digital, we open the door to competitors that do (like the way Netflix rapidly overtook Time Warner). The points which stuck with me were:
The link between digital identity and open banking
Digital identity is rapidly evolving and there is no consistent global standard. Steven Bankston, from Visa, updated us on Europe’s leadership and outlined Visa’s plans for a global platform to incorporate digital identity into a seamless payments experience. What really struck me was the inextricable link between digital identity and open data. The interplay between the two will create both opportunities and threats in coming years.
As I reflect on the two days I’m hopeful that it has helped us to inspire closer collaboration with our clients and partners for the year ahead. We can only succeed if our clients succeed and I believe that our first conference has started some great conversations.
By Bianca Bates. Chief Client Officer
Our inaugural Curious Thinkers conference, held on 24 & 25 September 2018, took our clients on a journey through innovation, thought leadership, product solutions and more to inspire thinking about the future of payments.
Over the course of the two days we covered a wide range of current and future-focused topics – from what’s happening globally in payments and how that impacts us here in Australia, to open banking, real-time payments, customer experience and how to drive innovation within organisations.
An exceptional line up of international and local thought leaders shared their expertise and insights, including: Dr Leda Glyptis (Chief of Staff, 11:FS), Nuno Sebastiao (CEO, Feedzai), Steven Bankston (Senior Director, Product Development Visa), Stephen Scheeler (The Digital CEO), Charlotte Rush (Innovation Consultant, Inventium), Rocky Scopelliti (Futurologist & Author), Scott Farrell (Partner, KWM) and many more.
Read the Conference highlights from our Chief Client Officer, Bianca Bates.
View video content from Curious Thinkers via the links below:
P&N Bank is Cuscal’s first client to launch instant digital cards, using the Cuscal Virtual Card API set. The APIs allow companies to provide their customers with new or replacement digital cards into their mobile wallet within seconds. Without a digital version of the card, customers can be without access to their money for days or even weeks.
Cuscal’s Virtual Card APIs are the most comprehensive instant card issuance solution in Australia. No other financial institution in Australia currently provides instant card issuance for new and replacement cards and gives its customers access to the full virtual card to allow online payments.
Instant access to the full card number is particularly useful as it not only allows customers to pay for things in person, but also buy things online. This is particularly useful for customers who are travelling and their cards are lost or stolen. They can simply log into their mobile banking application or internet banking, order a new card and continue their holiday uninterrupted.
Cuscal Head of EFT, Acquiring and Digital Lauren McCormack said Cuscal was thrilled to have been able to help P&N Bank deliver this great advancement to its mobile and digital banking capability.
“We see it as a real win-win for both P&N and its customers, saving time and money for everyone involved. We also hope that it will help P&N Bank customers get access to their money more quickly and easily in those awful, stressful situations we all find ourselves in when our cards are lost or stolen,” she said.
Not only does instant card issuance have great customer benefits, it is also very useful for financial institutions and other companies that issue cards. They can save money by not needing to physically mail out PINs to their customers and also start earning revenue sooner by giving customers quicker access to their money. In the future, companies may decide to save even more money by not issuing physical cards at all.
Financial institutions and their customers can realise even greater benefits if they combine Cuscal’s Virtual Card API with the Card Control API. Financial institutions can decide to enable controls on a card (eg restricting spend for instore/contactless payments) until the physical card has arrived with the customer. This reduces the chance of someone intercepting a card while in the mail and then being able to make fraudulent payments.
Cuscal’s solution currently works for Visa and eftpos credit, debit and prepaid cards. Cards can be ‘provisioned’ (enabled in a mobile wallet) to Apple Pay, Google Pay and Samsung Pay. The solution also works for any cards making payments via eftpos and Visa, companies do not need to be current clients of Cuscal to make use of the API’s capabilities.
Times have changed. It’s now normal for consumers to buy their groceries, clothes and travel, read news, socialise and research major purchases via their phones. Even essential government services like Centrelink and Medicare are encouraging their customers to use their digital channels rather than face-to-face contact. Financial institutions must also provide opportunities for customers to complete more of their banking via digital channels.
A recent McKinsey and Company report[i] shows that customers across Asia – including Australia – have made a clear shift to digital banking in line with smartphone usage.
Mobile banking is now the preferred option for standard banking transactions such as checking account balances and paying bills. The report highlighted that deep digital engagement with customers can generate considerable value for banks: digitally active customers are stickier – they purchase 1.6 products per year, compared to 0.5 on average for non-digital customers; and active digital customers also own 1.5 times more banking products than their non-digital peers.
Enabling digital engagement at the front-end, where consumers interact with their bank’s services, is a crucial part of developing digitally active customers. Banking apps that are easy to navigate and rich in features provide a myriad of benefits to customers – and ultimately to financial institutions too.
You can improve the richness of your existing digital channels, like banking apps, by introducing new functionality. This can increase your customers’ ability to self-service, encouraging ongoing, regular use of your banking services and improving their loyalty to your brand.
For a customer managing their banking, the ability to manage their card PIN through their banking app – rather than having to make time to visit the branch – is a perfect example of how a banking app which is rich in functionality can better meet customers’ needs. Indeed, for a customer with a crisis out of hours where they need money and have forgotten their PIN, the ability to take control and solve the problem themselves, using their banking app, can be an instant stress reliever.
Implementing enhanced card controls within a banking app is another great way to engage customers by giving them the tangible benefit of real-time management of their cards. Allowing customers to turn certain transaction types on and off with a swipe of their finger, or activate limit-based transaction blocks, creates both financially savvy and digitally engaged customers.
Enabling or disabling contactless payments, switching online or card not present transactions on and off, activating or de-activating ATM transactions (for domestic or overseas transactions) are all examples of everyday interactions banks can create for customers within their banking app. Some customers are asking for further controls, such as setting blocks on merchant categories and being notified when transactions are approved or declined.
There is benefit for banks in moving functionality into online or digital channels.
Empowering customers to self-serve helps to lower cost-to-service metrics and enables customer service staff to focus on other priorities and higher value transactions.
Using a banking app as a delivery channel can help solve pain points for both customers and financial institutions. A good example of this is the emergence of virtual card capabilities, to support instant card issuance. This technology allows a financial institution to digitally issue a card to a customer via their banking app or internet banking platform. The customer receives their digital card almost immediately after the order is processed. They can set their PIN, activate the card and use it online straight away. The card can also be provisioned to a digital wallet such as Apple Pay, Google Pay, Samsung Pay or a wearable like Fitbit Pay or Garmin Pay, and be used straight away, anywhere contactless transactions are accepted. No more waiting for several days for the plastic card to arrive before you can start spending.
Instant card issuance is a win for both institutions and customers. The financial institution earns transaction revenue sooner than with the traditional card and PIN ordering process, and saves money because plastic cards and PINs don’t need to be created or sent to customers. Cardholders benefit as they no longer need to worry about their PIN falling into the wrong hands, or wait for their card to arrive before spending in stores or online.
Digitally issued cards also go a long way to solving the lost card problem – because there isn’t a card to lose! And a virtual card on the phone, even if it is lost, is protected by the phone’s security.
And finally, if a customer loses their physical card – especially if they are travelling – being able to issue a virtual card instantly means that the customer isn’t stranded. It’s conceivable that they could lose their plastic card at breakfast on their last day, login to the app, cancel the old card and set up a new virtual card on their phone in time to check out of their hotel and go to the airport.
Without instant card issuance, the customer could have been stranded for days, or even a week.
At Cuscal, we are collaborating with our clients to help them offer engaging and innovative banking experiences to their customers. Our current suite of products is designed to promote efficiencies in banking operations and create self-service opportunities for cardholders. Our API suite includes enhanced card control APIs, PIN management APIs (including PIN change and PIN set functionality) and a virtual card set to facilitate instant card issuance.
These are dynamic times for financial institutions and we are excited to be assisting our clients to develop solutions that support a more digital way of banking.
By Lauren McCormack, Head of EFT, Acquiring and Digital
[i] Sonia Barquin, Viniyak, HV, Duhita Shrikhande, Asia’s digital banking race: giving customers what they want, McKinsey & Company, Global Banking Practice, April 2018
A gradual increase in the number of senior female appointments in recent years has helped Cuscal to hit its target of 40% of senior leadership roles to be held by women.
In May this year Helen Mediati, Cuscal’s General Counsel and Company Secretary was appointed to Cuscal’s Leadership Team. This followed the appointment of Bianca Bates to the role of Chief Client Officer, earlier the same month. Cuscal’s Managing Director, Craig Kennedy, says it has been a deliberate part of Cuscal’s long-term strategy:
“Cuscal is a payments company which straddles the worlds of technology and banking, both industries which struggle with gender diversity and female leadership.
We knew that having greater gender balance in our leadership would help make us a stronger, fairer, better company, so we have been working towards a goal of greater senior female leadership for a few years now. Three out of seven of my Leadership Team are now women (43%) and this ratio is consistent throughout leadership positions at Cuscal.
We know there’s still some way to go, for example our diversity at Board level isn’t what we would like it to be, but we’re pleased to hit this target and now need to maintain or improve it.”
Cuscal has employed a range of initiatives to improve diversity, female employment and leadership at Cuscal which include:
As of May 2018, Cuscal’s ratio of male/female employees was:
Pictured L to R: Bianca Bates, Craig Kennedy, Helen Mediati, Christie Welsh
Cuscal has appointed Bianca Bates to the role of Chief Client Officer, as part of Cuscal’s Leadership Team. This role replaces the role of General Manager, Product & Service, which Bianca has been acting in since February 2018.
Commenting on the appointment, Cuscal Managing Director Craig Kennedy said:
The Cuscal Board has confirmed Bianca’s appointment after an extensive search for the right candidate. I’m delighted that Bianca was successful and will continue her career at Cuscal after her success in previous roles over the past four years.
The change in title reflects our commitment to partnering with our clients and delivering a great client experience. Bianca brings significant experience in financial services and our business to this role, including, crucially, a great understanding of the needs of our clients.
Bianca has held a number of senior roles at Cuscal since she joined, including Acting General Manager, Product & Service, General Counsel & Company Secretary, Acting General Manager Shared Services and Head of Client Services. She has over 20 years’ experience in financial services with large and complex US and Australian companies, both public and private. Prior to Cuscal she worked in senior legal and compliance company secretariat roles with Genworth, GE Capital and DLA Phillips Fox.
In the highly competitive environment of consumer banking, finding comparative advantage over major players is a rare opportunity. However, recent research by Telsyte shows clearly that the reluctance of major banks to adopt digital wallets such as Apple Pay, Google Pay (formerly Android Pay) and Samsung Pay has created an opportunity for those institutions who have led the way in offering their customers more choice in the way they pay.
Aussies will move banks to pay with their phones or wearables
Recent research shows that mobile and wearable payment solutions like Apple Pay, Google Pay and Samsung Pay are increasingly influencing consumers’ choice of financial institutions.
The Telsyte study found that around one in five (22 per cent) iPhone users claim they are more likely to bank with a provider if it supports Apple Pay. This figure increases to 32 per cent for those who are also using an Apple Watch. This research shows a clear opportunity for financial institutions to differentiate from the major banks to acquire new customers – particularly those using Apple devices.
Mobile payments are growing in Australia
Although the number of payments made by mobile devices is still comparatively small, the use of mobile payments is growing quickly year on year. The RBA reported in its 2017 Consumer Report that only 2% of consumers had used a smartphone, watch or band to make a payment. This figure has grown exponentially to 14%, according to Telsyte’s study in 2018. This could be due to increasing understanding amongst consumers that mobile payments are more secure than Tap & Pay cards, which I discussed in my recent article on digital wallet security.
Other key takeaways from Telsyte’s research that have implications for financial institutions that are considering offering mobile payments to their customers include:
We were an early partner and adopter of mobile payment solutions, offering Apple Pay, Google Pay and Samsung Pay to our clients. At Cuscal we support over 41 financial institutions offering Apple Pay, Google Pay and/or Samsung Pay to their customers.
By Trent Gunthorpe, Head of EFT, Acquiring and Digital
When it comes to purchase convenience and security, Tap & Pay cards are the current leaders. But it is becoming clear that digital wallets are in the running to replace them. It is no longer a matter of “if” but “when”, with today’s announcement that eftpos cardholders can now use Apple Pay, adding to the suite of card schemes available on digital wallets. In addition to the convenience and ease-of-use benefits of digital wallets, it’s their cutting-edge, multi-layer security that makes them the better and safer option for payments.
However, surveys consistently show that customers are concerned about the safety of digital wallets. This concern arises in part from poor communication on how digital wallets are implemented and how they work. Digital wallets were designed to address the security flaws in cards and create a more secure payment method. They are safer than cards, by design, and their security starts with the smartphone.
The multi-layer security of the digital wallet
The security advantage digital wallets have over cards begins with their access to the computing power and features of the smartphone, including specialised security hardware for protecting personal information. This gives the digital wallet app secure storage for payment information where other apps or malware cannot access it.
The token is a unique number that links the card to the customer’s device and digital wallet. This allows a customer to register the same card on multiple devices and with multiple digital wallet providers. It is generated by the payment infrastructure provider used by the digital wallet. The payment infrastructure provider stores the original account information on a heavily secured system called a Token Vault.
When a transaction is made the token is used by the payment processor to retrieve and verify the original card information from the Token Vault and complete the transfer of funds. The merchant never sees the actual card details and the account information never travels outside of secure networks. An additional benefit of tokenization is if the user loses their phone they do not need to cancel their card, but they do need to lock or remove the card from their digital wallet. Digital wallet providers have online services to do this in the event of a lost phone.
Finally, digital wallets are protected by the same 24/7 computer-based fraud monitoring and zero liability protections as Tap & Pay cards.
More than POS payments
Digital wallet providers are actively expanding the functionality of their apps. Digital wallets can be used to make purchases within apps and for online purchases. Some digital wallets can automatically provide your delivery address as part of an online transaction. The digital wallet may also store loyalty cards, event tickets and boarding passes that can be scanned from the screen of the phone.
As more transaction types are handled by digital wallets their use will continue to grow. With that growth will come a demand for financial institutions to offer their customers access to the digital wallet provider of their choice. Banks that won’t or can’t will lose customers.
Transitioning to digital wallets
Customers are already choosing financial institutions that are compatible with their phone and digital wallet provider. This is a clear signal that the technology is proven and spreading from early adopters to the mainstream. At the same time, the back office technology has been tried and tested. Deploying digital wallet services is now easier than ever.
Today or tomorrow, your customers are going digital. Be there for them. Find out more about our digital solutions.
By Trent Gunthorpe, Head of EFT, Acquiring and Digital
