indue latitude vol 33
TRANSCRIPT
VOLUME 33 DECEMBER 2014
THE FUTURE OF DIGITAL PAYMENTS
Visa and Apple opening a new era of payments on mobile devices
National awards aplenty for Queensland Country
BPAY View takes hold in 2014
Visit to Google HQ offers unique insight for QPCU
Indue Ltd ABN 97 087 822 464
Address all Latitude mail to Latitude Magazine PO Box 523 Toowong QLD 4066
EDITORIAL TEAM phone +61 7 3258 4265 fax +61 7 3258 4265 email [email protected] web www.indue.com.au
INDUE LTD Manuel Garcia Chief Executive Officer phone +61 7 3258 4228 email [email protected]
Derek Weatherley Chief Operating Officer phone +61 7 3258 4236 email [email protected]
David Childs Chief Financial Officer phone +61 7 3335 4109 email [email protected]
Peter Anderson Chief Risk Officer and General Counsel phone +61 7 3258 4205 email [email protected]
Matthew Hynes Chief Technology Officer phone +61 7 3258 4282 email [email protected]
Michael Swannell Executive Manager Payments phone +61 7 3258 4248 email [email protected]
Elizabeth Flynn Head of Corporate Marketing and Communications phone +61 7 3258 4265 email [email protected]
Matt Adney Executive General Manager – Products and Services phone +61 2 9479 8398 email [email protected]
DISTRIBUTIONAUTUMN April 2015WINTER July 2015SPRING November 2015
Welcome to the December edition of Latitude.As the year rapidly draws to a close and Christmas approaches, it is a great time to reflect on the achievements over the last 12 months. Indue has achieved outstanding results, but we continue to look at ways in which we can give our clients a competitive edge to attract and retain customers through the products and services we provide.
This edition includes updates on a number of industry initiatives with a particular focus on the future of digital payments. On page 5 you can read about the exciting development that is Apple Pay, while on page 4 there is an update on the eftpos Central Payments Hub going live. For those of you wanting some insight into Google’s new products and business objectives, turn to page 10 as Queensland Police Credit Union CEO, Grant Devine, had the opportunity to visit the search engine giant earlier this year. Finally, we congratulate Queensland Country Credit Union on their outstanding array of awards, including the Employer of Choice for Gender Equality award from the Workplace Gender Equality Agency.
I hope you enjoy reading this edition of Latitude.
We wish you a happy and festive season.
Kind regards
Manuel GarciaCHIEF EXECUTIVE OFFICER, INDUE
WMA-10305 Latitude magazine print ad – March 2013_210x297_V5.indd 1 21/11/14 2:56 PM
news in brief
New era for Australia’s eftpos as central payments hub goes live on scheduleeftpos has announced that its new centralised payments hub is now live, heralding a new era for Australia’s most widely used payments network.
eftpos Managing Director, Mr Bruce Mansfield, said Bendigo and Adelaide Bank, ING Direct, Suncorp Bank and Strategic Payments Services (SPS) were already connected to the hub, with ANZ to follow before the end of the year. Indue will connect to the eftpos Hub in 2015.
Mr Mansfield said the hub would replace a network of complex bilateral links between financial institutions and merchants that had existed since eftpos was first launched in Australia almost 30 years ago.
He said the new infrastructure aimed to bring new eftpos payments products, such as online, contactless and mobile payments, to market significantly faster and more efficiently.
Just 11 months after we signed a contract with FIS to build the eftpos Hub, we are now live with a number of financial institutions and processing eftpos CHQ and SAV transactions, Mr Mansfield said.
We expect all of our Members to be connected to the hub by September 2015, marking a significant achievement in industry cooperation.
This new centralised infrastructure will boost payments efficiency and innovation, helping to ensure that eftpos continues to be a local, trusted payments choice for Australians into the future, as we move to new technology platforms such as mobile and online. The hub also has the potential to carry other payments traffic and support industry initiatives.
Visa and Apple opening a new era of payments on mobile devicesNew Visa Token Service facilitates secure consumer payments with new Apple devices.
This service is available in the U.S with a broader rollout across different markets to occur starting in 2015.
The global leader in payments announced it is supporting consumer payments with the new iPhone 6 and other new Apple devices. Thanks to a new capability called Visa Token Service, participating financial institutions in the U.S, and eventually abroad, will be able to add Visa debit and credit cards to Apple Pay, Apple’s new payment service, and enable their customers to make easy and secure purchases at select merchants both in stores and via apps.
Visa Token Service technology works by replacing sensitive payment account information found on plastic cards with a digital account number or “token” that can be safely stored on mobile devices and used for in store and via app purchases. Visa will roll out the service to financial institutions in phases – initially supporting early participants in the Apple Pay launch, and then extending the service availability to other card issuers.
“Combining the trust, scale and security of Visa payments with Apple Pay will accelerate adoptions of mobile payments”, said Charlie Scharf, Chief Executive Officer, Visa Inc.
“We said from the beginning that token services would provide great new consumer and merchant experiences, and you’re seeing it today in our efforts with Apple, and there’s more to come.”
Apple Pay lets you make purchases in some of the most highly visited stores and within apps on the App Store with just the touch of a finger, using the new Apple devices. Visa account holders will continue to receive all of the rewards, benefits and security offered by Visa credit and debit cards.
By enabling Visa account holders to also make purchases in store and in app with their new iPhone 6 and other new Apple devices, consumers will now have a seamless experience with their preferred form of payment.
“The combination of new digital experiences from Apple with new network capabilities from Visa provides for great payment experiences and enhanced security for millions of Visa account holders, merchants and financial institutions”, said Scharf.
Apple Pay lets you make purchases in some of the most highly visited stores and within apps on the App Store.
LATITUDE VOLUME 33 DECEMBER 2014 PAGE 5
In November, Queensland Country was announced as an Employer of Choice for Gender Equality (EOCGE) by the Workplace Gender Equality Agency.
Queensland Country is a consecutive winner of the previous Workplace Gender Equality Agency’s ‘Employer of Choice for Women’ award. However, EOCGE is special as it is the first to be awarded under the new rigorous criteria implemented by the Workplace Gender Equality Agency.
The agency reviewed the citation in 2013 to highlight the growing recognition of the need to integrate men into diversity initiatives with a focus on promoting acceptance around men taking parental leave and working flexibly.
Also, hence the awards name change from Employer of Choice for Women to Employer of Choice for Gender Equality.
Queensland Country is only one of 76 companies to be recognised nationally and only one of six Queensland companies, down from the 125 recipients when the predecessor citation, the EOWA Employer of Choice for Women, was last awarded in 2012.
Queensland Country’s CEO Aileen Cull said the recognition reflected the company’s commitment to ‘our people matter most’ philosophy.
“Queensland Country work hard to provide equality in the workforce for people of any age, background or gender with working conditions and training opportunities that support our staff.”
Ms Cull said that the award means a great deal, as it publicly recognises the initiatives that Queensland Country has implemented to value every employee. Initiatives which include eight weeks parental leave and the Diversity and Equality Strategy.
“Queensland Country is proud to continue to be an Employer of Choice”, Ms Cull said.
When announcing the 2014 award winners, Helen Conway, Director of Workplace Gender Equality Agency (WGEA) said:
“Holders of the 2014 WGEA Employer of Choice for Gender Equality citation should be celebrated and championed as leading practice role models and innovative thinkers on issues of workplace gender equality.
National awards aplenty for Queensland Country
They can be distinguished by their commitment to “doing” rather than simply “talking” and are driving the lasting cultural and organisational change that is essential for any organisation committed to maximising the potential of women and men.”
This citation comes on the back of two other major National Awards; CANSTAR and Mozo.
Queensland Country Health Fund, subsidiary company of Queensland Country Credit Union, was awarded the 2014 CANSTAR for Outstanding Value Hospital Cover for the state of Queensland. CANSTAR is an instantly recognisable symbol of value and integrity in the marketplace.
The online comparison site for financial services products completes an annual review of health insurance products offered in the marketplace and then measure the value of health insurance products based on benefits and price relative to a number of different consumer segments. Based on the annual review for 2014, CANSTAR awarded Queensland Country Health Fund the state award for outstanding value private hospital covers.
Ms Cull said that “Queensland Country Health Fund has been recognised for what we already knew to be true – we offer the best value range of hospital products available in Queensland.”
“Our mission statement is to be the best value health insurer in Queensland – and this award recognises that we are. This is especially impressive considering our health fund was reviewed against all of the major health insurers that sell health insurance in Queensland – and was considered to be the winner.”
Queensland Country Credit Union has been awarded the Top 5 Credit Union badge in the Mozo People’s Choice awards for 2014.
Mozo is an online rating site for financial services products. Customers are asked to rate their banking provider on overall satisfaction, price, features, customer service, convenience and trust.
Mozo aggregates each provider’s overall customer ratings in each category to determine the winners. In 2014 year over 200 providers were rated, across one or more product categories.
Queensland Country Credit Union scored an average of 8.86 out of 10, placing second overall in the Best Credit Union Category.
Ms Cull concluded that these awards, along with continuing strong financial performance are recognition of Queensland Country’s commitment to our Members and regional Queensland.
“We look forward to the opening of our new retail Branch and Head Office in Townsville in January 2015. We recognise the need to continue to develop and improve the services to Members and staff and our new facilities in Townsville are important steps to ensure we remain relevant and valued in a competitive banking environment.”
“Queensland Country work hard to provide equality in the workforce for people of any age, background or gender.”
LATITUDE VOLUME 33 DECEMBER 2014 PAGE 7
The Milestones Report released by the Australian Payments Clearing Association, the payments industry self-regulatory body, shows that as with cheques, Australian consumers are increasingly giving up cash in favour of cards, mobiles and online solutions.
But unlike cheques, cash will not disappear as a payment method in the digital economy, remaining as a default method if nothing else is available.
The Report on Australia’s progress on transitioning payments to the digital economy provides a special focus on cash. It draws from APCA-commissioned research The Evolution of Cash: An Investigative Study developed by RFi Consulting which has also been released. Both reports are available at www.apca.com.au.
The new research shows that Australians are using less cash as the uptake of contactless and other electronic payments continues to gain pace. The number of cash payments has declined 5% since 2005 – down to an estimated 11.7 billion in 2013 – reflecting the changing way in how consumers pay. This decline is predicted to accelerate, dropping a further 20% over the next few years before it plateaus in 2018.
The decline in cash use is supported by recent figures released by the Reserve Bank of Australia. In February 2014 there were 57.3 million cash withdrawals from ATMs – down from 60.0 million in February 2013. The value of these withdrawals dropped 9% to $10.8 billion. As the economy grows, cash needs will decline as digital methods dominate new activity.
APCA CEO, Chris Hamilton, said: “We will always have a need for cash, but the take-out here is that cash won’t be the first or only choice for making any payment, regardless of what it’s for. Australians love their “tap and go” cards, and we are going to see lots of competition and innovation in mobile payments in the next few years. Consumers are going to find that cash is not their first choice any more, even for convenience items like a coffee. Increasingly, they may also find that automated, super-convenient consumer services will accept a wide range of digital payments – but not cash.”
The RFi study also shows that the share of cash within all of the payment transactions made in Australia has dropped from 73% in 2005 to 59% in 2013, with a further share decline forecast to 43% in 2018.
RFi Consulting CEO, Lance Blockley, said: “As the Australian economy continues to grow, so does the total number of payments being made. The fact that the number of cash payments is now decreasing means that this form of payment is not only missing out on this overall market growth but is being displaced from where it was previously used. Australian consumers and businesses are adopting new electronic methods based on a variety of factors, including speed, convenience and security.”
Other key points in today’s Milestones Report include:
• The rapid decline of cheque use in Australia continues with a 13.3% drop in 2013, compared with 12.5% in 2012.
• Cheque values remain stable, suggesting that cheques are predominantly used for higher value business payments, rather than personal payments.
Australians embracing digital paymentsAPCA releases new report on transitioning payments to the digital economy
“Consumers are going to find that cash is not their first choice any more, even for convenience items like a coffee.”
204 BPAY View billers, with 111 added in 2014, covering 94% of the major Australian billers by volume.
Over 340,000 new BPAY View registrations.
BPAY View takes hold in 2014A key focus for the BPAY Scheme in 2014 has been the promotion and growth of the BPAY View service. This has paid dividends due to a three pronged approach.
The first challenge has been ensuring consumers are aware of the service. The most recent BPAY View campaign featuring our “Letter Box Man” which wrapped up in media at the end of August was incredibly successful. Consumer awareness increased by 6% from prior to the campaign running, with almost half of the Australian adult bill paying population now aware of the service. Importantly consideration to use the service in the future among non-users has risen to 45% of the population, and among existing users 74% plan to sign up for more bills.
This has translated to registration growth of 340,000 new BPAY View registrations this year.
The second part of the equation has been growing the biller base. In 2014 an additional 111 billers have been added, bringing the total number of billers to 204. This biller base now covers 94% of the major Australian billers by volume. From a consumer perspective, this means that most Australians can get their major bills delivered to their internet bank, whether it is a council rates notice, mobile, telephone or utility bill. The expectation is this growth rate of biller sign up will continue into 2015, further bolstering the BPAY View service proposition.
The final aspect of our approach has been working with our Members, providing best practise guides for implementing and improving the service and encouraging promotion.
This is a vital part of the equation and we encourage any Member to contact the Scheme office if support is required.
Indue joins as a Participant Member of the BPAY Scheme
BPAY is delighted to have Indue join as a Participant Member of the Scheme from October this year. Indue has always played an active role in the Scheme and we look forward to their positive contribution moving into 2015.
Disclaimer: BPAY View is offered by more than 150 BPAY Payer Institutions. Contact your financial institution to see if it offers BPAY View and to get the terms and conditions. This is general advice – before using BPAY View please review the terms and conditions and consider whether BPAY View is appropriate for your personal circumstances.
LATITUDE VOLUME 33 DECEMBER 2014 PAGE 9
“It’s never been more important to be relevant to our members, and to exceed the level of service and experience that they expect.”
Visit to Google HQ offers unique insight for QPCU
It would be hard to find an industry on the planet that hasn’t been affected in some way by the digital revolution of the past decade.
Global companies such as Google, Apple and Visa have helped to shape consumer experience across many industries, financial services included.
In July this year, QPCU CEO and Indue Director Grant Devine had the unique opportunity to visit Google headquarters in Mountain View, California and received an insight into the search giant’s new products and business objectives.
Grant’s tour of the facility was conducted by Frank Young, a Business Development Manager working on ‘Google Wallet’.
It’s just one of a number of Google products that aims to change the way consumers go about their everyday business.
‘Google Wallet’ integrates with your mobile phone and makes it easy to pay - in stores, online or to anyone in the US with a Gmail address. It works with any debit or credit card, on every mobile carrier.
It is not yet available here, but the Australian market has been favoured historically by Google as a testing ground for product expansion.
A presentation on the business objectives of the ‘Google Wallet’ project made it very clear that Google sees its key outcome as “joining the dots” in making life easier for consumers. Finding ways to make members’ lives easier is something considered very important by the QPCU executive management team.
Just last year, QPCU made a market leading move by allowing members to change their own PIN numbers online and has also seen great success with its new mobile app exceeding download expectations.
The mobile application alone has been downloaded by over 15 per cent of internet banking members, just two weeks after it launched. It’s not just younger members making use of QPCU’s online services, with a third of QPCU’s internet banking users aged 53 or older.
Grant said his visit to Google had further highlighted the importance of being an early adopter of new technologies, whilst noting the unique consumer trends of the US marketplace.
“It’s never been more important to be relevant to our members, and to exceed the level of service and experience that they expect,” said Mr Devine.
“Our digital platforms are well received by members, but we are on a constantly evolving journey to improve our online offerings.”
The trip to Google HQ has also inspired QPCU to look into its own use of customer data, and has led to a new data warehousing project. The long term plan is to help the credit union better understand its members, their needs and requirements. Projects like this will help better inform exactly how members interact with QPCU and decide what digital services to provide next.
LATITUDE VOLUME 33 DECEMBER 2014 PAGE 11
PO Box 523, Toowong QLD 4066
phone +61 7 3258 4222 fax +61 7 3258 4211email [email protected] web indue.com.au