Non-Bank Providers are often able to introduce less expensive products and services more quickly than the typical financial institution. In part this is due to the regulatory pressures in the financial industry, but these offerings could also be attributed towards the willingness to embrace emerging trends. In this session speakers offer insights on how the non-bank is poised to succeed in today’s market and how they are able to extend their offerings beyond consumers and begin working with the financial institution to extend the reach of both the bank and the non-bank networks.

1. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
© 2013 [Insert RPA Name]. All rights reserved. Through its Direct Membership in NACHA
[insert RPA Name] is a specially recognized and licensed provider of ACH education,
publications, and support. Regional Payments Associations are directly engaged in the
NACHA rulemaking process and Accredited ACH Professional (AAP) program. NACHA owns
the copyright for the NACH A Operating Rules & Guidelines. The Accredited ACH
Professional (AAP) is a service mark of NACHA.
Payments Systems Worldwide:
Non-Bank Providers Perspective
Nick Senechal, VocaLink
Neil Burton, Earthport
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.

2. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
2
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Agenda
• Banks and non-banks – Disruptors or collaborators?
• Examples
• Creating a platform for collaborative innovation

3. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
3
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
There is a broad spectrum of non-bank providers
Non-banks
ACH; e.g.
VocalinkService provider
e.g. Earthport,
FedGlobal*
Service
provider
e.g. PayPal*Alternative
currency
e.g. BitCoin
* Many non-banks are registered with and regulated by
authorities, and required to execute compliance processes
including KYC, AML and Sanctions

4. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
4
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
There is also a broad spectrum of banks
Banks
Retail
banks
Agency
Banks
Savings and
Loans
Credit
Unions
Wholesale
banks

5. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
5
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Collaborate or Compete?
Relationship NPV
FX
transaction fee
Operational services
Compliance
Systems and IT
Networks
Income Cost

6. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
6
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Balancing customer services and ROI
Non-banks
Non-bank share
Relationship NPV
FX spread
transaction fee
Relationship NPV
FX spread
transaction fee
Banks
Bank share
• Transactional revenue v cost
• Investment cost
• Time to market
• Stake in emerging space

7. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
7
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Example 1 - M-Pesa - Disruptor or Enabler?
• Kenyan realtime domestic clearing and settlement
scheme
• Frequently described as a mobile payments scheme
• Unique national requirements – itinerant domestic workforce
• Started as a non-bank innovator as banks not interested
• Commercial motive was brand loyalty rather than profit
• Now processes perhaps 30% of Kenyan GDP
• Now it has reached scale, banks are increasingly involved

8. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
8
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Segregated Accounts
Network Liquidity
FI:
EUR UK:
GBP
SG:
SGD
US:
USD
PH:
PHPAU:
AUD
JP:
JPY
ZA:
ZAR
US:
USD
US:
SGD
NO:
NOK
InstructionEarthport
client
PL:
PLN
Example 2 – Global ACH

9. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
9
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Example 3 – ACH
ACHs are a bank outsource:
• ACHs were an innovation that has allowed banks to :
• Create collaborative networks
• Outsource services and share costs in “non-compete” areas
• Access new value for banks’ customers
Bank
Bank
Customers accounts
Customers accounts
Bank
Bank
Customers accounts
Customers accounts
ACH

10. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
10
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Card schemes have adopted a different space...
ACH
Cardscheme
Merchant
Cardholder
Merchant
Cardholder
Bank
Bank
Bank
Bank
Card schemes have enabled banks to monitise commerce
transactions...
...although underpinned by the ACH and the bank account

11. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
11
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Digital technologies have created new
opportunities for the consumer
ACH
Cardscheme
Merchant
Cardholder
Merchant
Cardholder
Bank
Bank
Bank
Bank
“Digital native” entrants have been quick to exploit digital technology
Originally riding card rails they are now moving to the ACH to access funds
• Will they ever pay a fair price?
• Can banks exploit their own rails better themselves?

12. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
12
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Collaborative disruption by banks?
ACH models have been a stable
underpinning of economies for decades
but are generally basic:
• not tuned to operate at the pace of
digital channels
• Not connected directly to a wide
range of services and providers
Observable consequences
• Aggregation of financial flows by new
providers (e.g. wallets providers,
remittance providers)
• Disintermediation of banks from
basic financial transactions
A new ACH model can help banks once
again to reclaim space
3%
20%
47%
30%
none
small
medium
large
How much pressure is there
On ACHs to innovate?
Source: Survey of 76 payments experts in 25 countries, 2012

13. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
13
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Infrastructures must engage more
with the market
Source: Survey of 76 payments experts in 25 countries, 2012
A key task for ACHs will be to
build partnerships that enable
Banks to offer new services
to their customers

14. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
14
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Realising the connected vision
Create new value through ACH
Networks
Connect new, revenue earning
customers to banks
ACH connectivity
Standardised real-time
processing
The right commercial model
Co-creation of value
Connect new, revenue -
creating service providers to
banks
Re-intermediation

15. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
15
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
New propositions
Vision – driving bank-centric value from
existing capability
ACH
Open
Access
Network
Bank
Bank
Customers
Customers
Bank
Bank
Customers
Customers
Corporates
International
connectivity
Merchants
Smaller
businesses
Distribution
Network
Revenues, customer familiarity, re-intermediation
Service
providers

16. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
16
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Requiring more from utilities may be a better model
Regulations,
more
regulations
Least common
denominator
Innovator

17. © 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
17
© 2013 [Insert RPA Name]. All rights reserved. No part of this material may be used
without the prior written permission of [Insert RPA Name]. Content from other sources is
used with permission and requires the separate consent of those sources for use by
others. This material is not intended to provide any warranties or legal advice, and is
intended for educational purposes only.
Collaboration delivers more
Non-banks
Non-bank share
Relationship NPV
FX spread
transaction fee
Relationship NPV
FX spread
transaction fee
Banks
Bank share
• New products
• New markets & sources of income
• Speed to market
• Mitigate development costs and risks