1. Gil Gadot– EVP & CTO, Managing Director APAC 8th April, 2011
Low Value Payments & Payments Hub Session: With the growing volume of low value payments in Asia, the search for interoperability continues
Gil Gadot– EVP & CTO, Managing Director APAC
8th April, 2011

2. Topics Low value payment – traditional definition
The “new” low value networks
SEPA /FPS/MAMBO
Interoperability mobile/Web/EIPP
Payment Spider Web
Payments HUB topology and benefits

3. Low Value Payment – Traditional Definition
Relatively low denomination payment
Delivered and processed in a batch
Non-urgent
Cleared and settled over hours
Domestic & Single Currency
Revocable
Low care – i.e. no repair
Rejects are asynchronous
Examples: ACH, BUCS, SEPA, GIRO
B2B B2C

4. Low Value - New Networks
Not necessarily low denomination payment
Delivered and processed as batch or single payment
Non-urgent
Cleared in 15 seconds and settled over hours
Domestic & cross border
Web & mobile friendly
Revocable
Low care – i.e. no repair
Rejects are asynchronous
UK FPS, CNAPS 2, MAMBO…
B2B B2C P2P

5. Europe - TARGET EBA SEPA
Simplification of Market Infrastructures
NATIONAL
MARKETS
LOCAL CLEARING SYSTEMS
IRIS
ELLIPS
TOP
TBF
SPGT
RTGSplus BI -
REL
SLBE
CHAPS Euro
ARTIS
HERMES
FRANCE
GERMANY
BELGIUM
SPAIN
PORTUGAL
ITALY
GREECE
AUSTRIA
IRELAND
LUXEMBOURG
NETHERLANDS
FINLAND
ACH
RTGS
TARGET ‘INTERLINKING NETWORK’
LINKED
EU BANKS
SINGLE REGIONAL NETWORK
(TARGET 2)
ACH NETWORK
(SEPA)
NET SETTLEMENT
(EBA EURO1)
NET SETTLEMENT (EBA Euro1)
Disparate National Infrastructures
Single Pan-European Infrastructure
PE-ACH CSM
NON-PE-ACH CSM
INTER-OPERABLE NETWORK
by 201x
Settlement
Dec 31, 2006 E50,000
Governance
European is driving now.
Regulation change all the time.. You need a system to achieve it.

6. Faster Payments - UK
Originating
Credit Institution
Bank of England
Beneficiary
Credit Institution
Direct Agency - Receiver
Direct Agency - Sender
Member –Direct Sender
Submitting member
Sending FPS institution
Originating Credit Institution
Central
Infrastructure
Member –Direct Receiver
Submitting member
Sending FPS institution
Originating Credit Institution
Performance
SOA
Standards – ISO20022
BAM integration
Pure Web client
Corporate - DCA
Third Party Beneficiary –
Direct Receiver
Members are the 13 UK banks, which agreed to meet scheme’s membership rule
Direct Agencies are sponsored by Members, who take full responsibility for them in FPS
Corporates are customers of Members or Agencies
OCI’s and BCI’s (aka Indirect Agencies) are sponsored by a Member and communicate with FPS via a Member
SIP Clears in 15 seconds

7. MAMBO – My Account , My Bank Online Australia
MAMBO intends to support the following functions:
Bill Presentment and Payment – allows electronic delivery of bills to a customer’s internet bank, with seamless integration with BPAY payment functionality
Payment Request and Payment – similar to above, in summary transaction form. More suitable for repeat or ad-hoc payment arrangements or schedules thereof
Person-to-person Payment Request and Payment – enables address holders to request and receive payment in real-time without disclosing BSB and account number
Payment With Advice to Address – delivery of remittance information with payment to address
Real Time Notification with Payment
Non-Value Items Delivery – delivery of documentation or commercial communications
Online Payment – initiating and authorising an online payment

8. New Network Characteristic
24/7/365
Heavy burden on the bank’s infrastructure
Also need “parallel account structure”
Real time
Goal of 15 seconds end-to-end (customer-to-customer)
Goal redefined by removing
Payment capture and pre-processing: Seconds to hours
Beneficiary advising: Approximately 20 min.
Posting: 2 hours to next day
Tiered processing
Bulk & retail periods (00:30 – 04:00 & 04:00 – 00:30)
Payment Caps
Not currently used
Risk controls
Different limits for bulk (100K) and individual payments (10K)
Different certainty of acceptance the receiving bank)

9. Low Value Interoperability Mobile/Cash management/EIPP

10. Existing Architecture – The Problem
Payment & Treasury Systems
Low Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Cards
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Check
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
High Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Teller
Core
Systems
Channels
DDA
Call Center
Website
G/L
IVR
Reconciliation
Mobile
Source: Financial Insights

11. Existing Architecture MNC – The Problem X4
Payment & Treasury Systems
Low Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Cards
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Cards
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Cards
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Check
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Cards
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
High Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Check
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
High Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Check
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
High Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Check
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
High Value Pymts
Pricing
Risk & Fraud Mgmt.
Security
Monitoring & Rptg.
Teller
Core
Systems
Teller
Channels
DDA
Teller
DDA
Call Center
Teller
DDA
Call Center
DDA
Call Center
Website
Call Center
G/L
Website
G/L
Website
G/L
IVR
Website
G/L
IVR
IVR
Reconciliation
Mobile
IVR
Reconciliation
Mobile
Reconciliation
Mobile
Reconciliation
Mobile
Source: Financial Insights

12. The “Simple” Version of Payments Landscape In Major Markets
The complexity of global payment structure. Banks need to compete in a red ocean and blue ocean to be competitive and to serve its customers.
Europe
SEPA
MEPS in Singapore
LVTS in Canada
Fedwire in US
Swift Rtgs
Sic in Switzerland
UK Chaps 12

13. Hubs - Solution In Many Other Industries
FedEx
Airports
Guaranteed delivery to anywhere in the USA overnight
Hubs concentrate activity
Distributed point –to-point connectivity doesn’t scale, is difficult to manage, prone to operational failures and expensive.
Simplify.
Reduce costs & risks.
Urban Development
Web Marketing
Hub City
Transportation
Supply
Information networks
Internet Hub
Free content
Community
Permission-based
Bookmark, RSS relationships

14. The Payment Hub Combines Interfaces and Functions
& Treasury Systems
High Value Pymts
Unique Functions
Interface with Settlement Network
Cards
Unique Functions
Interface with Settlement Network
Low Value Pymts
Unique Functions
Interface with Settlement Network
Central
Database
Check
Unique Functions
Interface with Settlement Network
Payment
Services
Hub
Pricing
Risk & Fraud Mgmt.
Security
Teller
Channels
DDA
Call Center
Website
G/L
Core
Systems
IVR
Reconciliation
Mobile
Source: Financial Insights, 2007

15. Services Hub Can Eventually Replace Your Legacy Systems
Payment & Treasury Systems
High Value
Cards
Central
Database
Low Value
Check
Payment
Services Hub
Pricing
Risk & Fraud Mgmt.
Security
Interface with Settlement Net
Unique Functions
Teller
DDA
Channels
Call Center
Website
G/L
Over to Dana
IVR
Core
Systems
Mobile
Reconciliation
Source: Financial Insights, 2007

16. Payment Services Hub
A Payment Hub Is An Intelligent And Central Engine:
Capture and mapping of payment information
Enabling workflow, business, and regulatory rules
Clearing and settlement routing optimization
Risk/liquidity mitigation procedures
It Employs Service Orchestration:
Reacting to events
Orchestrating payment services and other banking systems
The Payment Hub Is Not:
Just a messaging component
Just a simple payment router
A discrete technology