ANNUAL REPORT 2015
POWERING ECONOMIES, EMPOWERING PEOPLE
When money moves easily, it powers economies. At VocaLink we empower banks and other financial institutions to move money quickly and securely by providing them with world-class technology and payment industry expertise.
In the past year we have taken major steps in shaping the global payments landscape through innovation. The UK Faster Payments Service continues to set the standard for national payments services. Other countries have watched the transformation of UK payments and are seeking to adopt our technology and world-class service standards. Our Immediate Payments Solution builds on the success of Faster Payments.
We increase payment efficiency and empower people to do more with their money by boosting innovation throughout the payments value chain and developing services that broaden access to payment services.
The global payments market is evolving fast and we are working at the heart of new developments. New technologies and alternative payment methods are emerging that offer credible alternatives to cash and cards.
This year, VocaLink continued to provide a high-quality technical infrastructure that supports innovation and promotes competition. We continue to define what the future of payments means for our customers and for economies worldwide.
We secured a contract with The Clearing House (TCH) to help build and deliver the core elements of a new real-time payment system in the U.S.
We announced an agreement with National ITMX Co. Ltd, Thailand’s main interbank payments infrastructure provider, to explore the implementation of immediate payments in Thailand.
We completed the technology for Zapp and proof of concept that a clearing system can be used for consumer and business billing and payments.
We launched PayPort in the UK, bringing fast, easy access to Faster Payments to a new range of financial and non-financial organisations.
Financial performance remained strong, with revenue of £182m, up £5m from 2014, with core profit before interest and tax (excluding Zapp development spend of £31.7m) of £45.6m and a healthy cash balance of £75.4m.
Our responsible business vision and implementation has been rewarded with a 94% score against the Business in the Community Corporate Responsibility Index, and we were awarded 3.5 star status.
We participated in the Best Companies ‘b heard’ survey and were accredited with our first star rating. This places VocaLink in the top third of mid-sized organisations in the UK.
The first revenues were booked by our data insights business. Live solutions included its invoice redirection fraud solution and a new analytical platform for Bacs payments.
We will continue to develop and improve future platforms for UK payments. However, as a blueprint for the future is developed, VocaLink remains committed to enhancing its existing platforms. We will continue to collaborate with customers to meet or exceed their requirements while supporting industry innovations such as Paym, which benefit all market participants.
In April the Payment Systems Regulator (PSR) launched. This is of greatest relevance to our core business comprising Bacs, LINK and Faster Payments. Working with the PSR, Payments UK and the Payment Strategy Forum is a key element of our strategy. We believe that our technology innovation and practical expertise is of great value to new customer market entrants as well as incumbents and we look forward to servicing the needs of a broadening customer base.
Access. In recent years we have invested substantially to provide secure and universal access to our payment systems. PayPort, our new managed service, has its first customer. This is highly significant as it simplifies access to Faster Payments for smaller financial institutions. PayPort enables those financial institutions to offer a superior service to their own customers, boosting innovation and competition across the industry, to the benefit of everyone.
Data Insights. We are working with regulators, financial services organisations and other stakeholders to develop a suite of new and innovative products to benefit consumers, businesses and the wider economy. These products will significantly improve the customer experience, speeding up processes and reducing barriers through innovation and operational efficiencies.
Zapp. Zapp’s Pay by Bank app is of great interest to business and consumers alike and offers all the benefits of real-time payment and billing without a card using your smart phone. By harnessing the power of VocaLink’s real-time clearing system, payment is easier, quicker and the risk of fraud greatly reduced as a result of our innovative tokenisation solution.
In 2015 we made significant progress in several key export target countries. The FAST service in Singapore, which is supported by our Immediate Payment Solution, has operated at 100% availability since inception. Now bank customers can pay who they want, when they want, in real-time.
In October we announced an agreement with National ITMX Co. Ltd, Thailand’s main interbank payments infrastructure provider, to develop the plans for the introduction of mobile payments underpinned by our Immediate Payments Solution as a strategic platform in Thailand. We believe that, over time, the Thai economy will benefit significantly from real-time technology as a driver of payment efficiency and innovation.
Most significantly, in December we signed a contract with The Clearing House to help build and deliver the core elements of a new real-time payment system in the US. As a central part of a wider movement to overhaul payment systems in the US, our ISO 20022 standard real-time payment system will facilitate a step-change advancement in US payments.
It is also our intention to participate in the modernisation of European payments. There is currently no national real-time infrastructure in the Eurozone and instant payments are the next stage of the SEPA project. Our overlay services such as Zapp and Paym have international appeal and we will continue to cultivate these opportunities.