Further Information

The daily average in Q2 2021 of Real Time Gross Settlement transaction values through the UK clearing system is £703,939,000,000, €672billion through European clearing (delivery versus payment) and $9,313billion through US clearing system every day.

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Currently, networks accessed include LINK, VISA, Faster payments, BACS, CHAPS, CREST and Mastercard. However, legacy systems operated by the Incumbents are costly, slow, prone to outages (Santander May 2021) and difficult to add new functionality without disruption.

Our competition is limited to “big four” (HSBC, Barclays, Natwest RBS and Lloyds) and now Clear Bank (UK) and Bank of London as well as the largest international players.

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Nevertheless, the UK Clearing Bank market has been “static” for decades until one new entrant in 2017 and one further in 2021 providing an open door opportunity to confluence, first in the UK, and then in Europe and the US.

There are 746 million transactions per month (clearing) in the UK with a value of £7,175 million.

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There is £1.3 billion in cost of transactions including VISA and MasterCard interchange fees (one of confclear’s addressable markets), which in 2020 was the equivalent to £46 per household.

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New challenger banks generate additional transactions by offering easy access to services such as FX, share trading and the purchase of cryptocurrencies.

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Confluence intends to redefine the current account offering and therefore the market for current account services and the Point of Sale terminal/ gateway payment market to create an “on us” (lower interchange fees) transaction environment.

Potential creation of a credible competitor to VISA and Mastercard in card issuing and transaction acquiring.

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Currently, a UK based account holder paying for goods and services in a UK retailer (which uses another UK bank or card acquirer) will typically have its transaction ultimately authorised through  VISA or MasterCard and as a result an interchange fee will typically be paid to either VISA or MasterCard which are both based in the US.

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The EU seeks to build its own competitor without the UK to remove the outflow of interchange to VISA and MasterCard and therefore reduce costs to businesses and consumers within the European Union. This validates confluence’s own strategy.

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Previously, Cirrus, Maestro, Vocalink and Access were UK based schemes acquired by or subsumed into US based Visa or MasterCard

UK banks and financial institutions will benefit from cost reductions as will retailers which will, in turn, benefit the UK economy overall by reducing costs to consumers.

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Confluence’s point of differentiation will be its proposed UK clearing bank licence.

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• Offer banks and retailers “on us” transactions at lower cost, at a lower risk and using ISO 20022 messaging standard;

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• Offer UK banks interoperability with other UK banks without recourse to Visa and MasterCard and their associated charges or interchange fees whilst creating a new ubiquitous brand;

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• Allow UK banks to be part of the creation of a UK-based pervasive payment method to rival the current big American brands and reduce costs in the network;

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• Offer card issuing in its own brand as an alternative to VISA and MasterCard at a lower operating cost with the brand featured on conflunence's payment acceptance devices; and

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• be provided entirely carbon neutral in the cloud.