Evolution of SWIFT pricing September 2015
Learn more about the evolution of SWIFT's pricing over the past years, and plans to continue to evolve pricing in the context of SWIFT2020 2
SWIFT s pricing initiatives on messaging timeline Creation of SWIFT Continuous yearly FIN price decreases Community pricing for Market Infrastructures LVP pricing Attract small users one price fits all one price / message -30% FIN price -20% FIN price Towards SWIFT 2020 1973 1980 1993 1994 1995 2000 2002 2003 2004 2006 2007 2008 2010 2014 2015 2020 Messaging Tiering Geography pricing Customer Global Tiering New Tiering Removal geographical zones Launch of Fixed Fee Program Launch of discount for High Volume Connections extending discount for High Volume Connections to InterAct and FileAct High growth Fixed Fee Program Ongoing 5 year pricing challenges -58% -51% -56% -30-45 % 3
Price reductions: evolution of FIN Average Message Price 2003-2014 4
Impact of Pricing initiatives on messaging some examples -80% Messaging price reduction since 2003 0.0005 EUR -57% for the smallest (global tier 1) customers Low Value Payments (LVP) Community Pricing: price per transaction = 2000 transactions for 1 EUR. Over 22 billion LVP payments via SWIFT per year. 30+ million EUR Discount for High Volume Connections foreseen in 2015 60+ million EUR Fixed Fee Savings foreseen in 2015 300+ million EUR Rebate given back to the community over the last 10 years 5
Pricing initiatives on non messaging some examples HSM subsidization Both in 2002 and in 2012 the HSM boxes (20 thousand USD per customer) were given to the customer for free Training fees As of 2000 the training fees were defined based on the country Alliance Entry 1997: Alliance Entry created for small/medium sized customers up to 30% cheaper than Access. Lite2 connection 2009: Cloud based, low cost solution for small customers including all connectivity components. Average cost of 700 USD/month. Entry fees As of 2002 the entry fees for joining SWIFT were removed (2-10 thousand EUR per customer joining) KYC Registry 2015 incentive: possibility to get 6 to 12 month free of charge 6
Price reductions: evolution Average Message Price (in EUR cents per Kchar) 7
Lower the total cost of ownership pricing initiatives messaging tiering and geography pricing (1994,2002,2003) FIN price decreases (1995-2000, 2010, 2014) New prices InterAct and FileAct (2004) Launch Fixed Fee program (2008) Fixed Fee program extended to Global Tier 3 (2012) Community pricing for Market Infrastructures (2007) Low Value Payment pricing (2008) High Volume Connections discount (launched 2010 extended in 2014) Rebates (almost yearly) HSM subsidization (2002 and 2012) Training fees country level (2000) Alliance Entry (1997) Lite2 connection (2009) Entry Fees removed (2007) KYC Registry (2015) Small customers Large customers 8
Evolution of Traffic Volumes and Messaging Cost traffic evolution (Kchar) messaging cost evolution unit cost evolution (2nd axis) 1400% 1200% 100% 1246% 120% 100% 1000% 80% 800% 600% 60% 400% 40% 200% 0% 100% 100% 111% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FY est. 9% 20% 0% 9
SWIFT Pricing Principles 1. Designed to encourage usage 2. Recognize the contribution of large users 3. Maintain the cooperative spirit 4. Reduce barriers to entry for smaller users 5. Implement community pricing when required 6. Economically sustainable 7. No long term cross-subsidisation between products 10
Towards SWIFT 2020 Pricing principles remain valid for the future Continue price decreases for messaging Targeted pricing actions for non-messaging products More ad-hoc and bundled offers to answer market demands 11
12 FIN - Average daily number of messages Total SWIFT, all markets (in million per day) 26 25 24 23 22 21 20 19 18 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2013 Actuals 2014 Actuals 2015 Actuals Best month ever
FIN - Average daily volumes - YTD Actual growth September 2015 YTD vs. September 2014 YTD EMEA Americas Asia Pacific Total Payments +5.9% +9.9% +11.2% +7.5% Securities +10.0% +12.3% +23.5% +11.9% Treasury +8.2% +10.2% +23.0% +10.9% Trade -5.4% -2.4% - 2.6% -3.7% Total +7.9% +10.9% +16.2% +9.6% Regional weight in total FIN traffic 66% 21% 13% EMEA Americas APAC 13
17% 3% 7% 1% 76% 96% InterAct and FileAct - Average daily volumes Actual growth September 2015 YTD vs. September 2014 YTD EMEA Americas Asia Pacific Total InterAct +19.2% +35.2% +8.8% +20.8% FileAct -0.7% +6.9% +12.3% -0.4% Regional weight in InterAct and FileAct traffic InterAct FileAct EMEA Americas APAC 14
15 FIN - Average daily number of messages Romania experienced strong growth of +50% across five years 80,000 70,000 60,000 50,000 40,000 30,000 +50% +50% All Markets Payments Securities Treasury 20,000 10,000 0 +144% -44%
www.swift.com 16