Cuscal has rejected claims that it is preparing to restructure the transaction fees it charges fintech clients for connecting them to the New Payments Platform.
Several industry sources told Banking Day on Monday that Cuscal had told its NPP clients it would be moving to levy fees as a percentage of the value of each transaction they push through the real time payments platform.
The industry sources told Banking Day that fintech clients had been notified by Cuscal that the new fee would be introduced in 2023.
However, Cuscal’s chief client officer and deputy chief executive Bianca Bates last night rejected the claims, indicating the service provider’s current pricing approach would be retained.
“We can confirm that no notifications has been provided to Cuscal clients using our NPP service that there is an intention to shift or ‘overhaul’ or ‘restructure’ our current pricing approach,” she said.
“This is also the case for new clients looking to take Cuscal’s NPP service offering.”
Cuscal’s current pricing method for providing access to the NPP is perceived by some in the industry to be a flat fee regardless of the value of each transaction, but when asked to describe the existing approach to setting fees, Bates said the following:
“Cuscal supports our clients with a pricing structure that ensures they can leverage our scale but also benefit from the value that is derived when they also achieve scale.”
As a shareholder in the NPP with full participant status, Cuscal competes against other participants such as Australian Settlements Limited and the four major banks to give fintechs access to the real time payments platform.
Cuscal’s NPP sponsorship offering is the most popular in the market, partly because fintechs are worried about the possibility of exposing their business processes and customer data to the major banks.
Cuscal’s NPP-related client base includes payments providers such as Assembly Payments, Merchant Warrior and Monoova.
The number of fintechs plugging into the NPP is expected to increase over the next two years as new functionality such as mandated payments (branded as the PayTo service) are added to the platform.
However, the reluctance of fintechs to use major bank-managed channels in to the NPP has created heavier demand for the Cuscal and ASL pipelines.
While this has created more opportunities for these companies, it has also raised questions about whether they each have the capacity to meet demand.
When asked whether Cuscal had the capacity to put more fintechs through its NPP pipe, Bates said:
“Cuscal is committed to growing our business and enabling the success of new and existing clients in all payment channels, including NPP.”
Bates confirmed Cuscal was also planning to expand its range of NPP-related services, including PayTo functions in the middle of next year.
In a LinkedIn post responding to the article published in Banking Day on Tuesday, the chief executive of NPP Australia Adrian Lovney said his company had no intention of moving to a value-based transaction fee or an interchange pricing model for setting wholesale fees levied on shareholders of the NPP.
“When a wholesale transaction fee is introduced, it will be on a per transaction basis and will be the same for all NPP Participants,” he said in the LinkedIn post.