ISX has relied upon a number of Australian banking partners to...

ISX has relied upon a number of Australian banking partners to assist it with its SWIFT transfers to various
international jurisdictions under a Tier 2 arrangement. The Company has been a client of various Australian
banks and has relied upon those banks and their SWIFT systems in the past.
Due to the various problems faced by Australian banks, including a number of AML failures, the Company is
no longer in a position to reliably conduct SWIFT transfers originating from Australia.
ISX is currently in the process of putting in place its own Tier 1 arrangements via the European TARGET2
framework that will allow it to incorporate its Paydentity™ platform into incoming and outbound
transactions and ensure that it is independent of 3rd party banks for SWIFT transfers. Information on
TARGET2 can be found here https://www.ecb.europa.eu/explainers/tell-me/html/target2.en.html
Paydentity™ is an advanced anti-money laundering, anti-fraud and anti-crime systems that screens
transactions in real-time. It can screen inbound and outbound SWIFT transactions from the external sender
or to the external beneficiary in real time against law enforcement, sanction, politically exposed person
lists, and court databases, ensuring the integrity of transactions executed by ISXPay®. ISX IBAN account
holders are subject to customer due diligence processes at account opening.
In conjunction with Paydentity™’s Know your Customer’s Customer (“KYCC&rdquo function, ISX has the ability to
determine whether the initiator of a transaction is, in fact, the person(s) authorised to operate the sending
account and can verify the identity and screen the sender. When using its own Tier 1 infrastructure, the
Company is able to detect and report Suspicious Matter Reports in real time to financial intelligence units.
The ability to offer SWIFT outbound capability contributes to the attractiveness of the IBAN based
ecosystem, and ultimately inflow GPTV. ISXPay® sends and transmits monies via the Single Euro Payments
Area (“SEPA&rdquo network to over 4300 European banks, but also relies on SWIFT transfers for bidirectional
transfers outside the European Economic Area (“EEA&rdquo / European Union (“EU&rdquo based SEPA network.
As a consequence of ISX temporarily suspending outbound SWIFT (but not inbound), there will be a
softening in the growth of GPTV until end of February, with the FY2019 impact to be factored into the
revised earnings guidance to be issued next week. ISX will still be able to receive monies from outside the
EEA/EU and distribute within the EEA/EU via its own Tier 1 SEPA connectivity.
The Company’s own independent SWIFT Tier 1 facilities are anticipated to be operational by end-February
to mid-March 2020, utilising the EU’s TARGET2 central-bank to credit institution (bank) infrastructure. As
such, the temporary outage and transition to own facilities will ensure that the Company does not suffer
contagion from other banks.
Paydentity™ integration with banking partners is an option via an integration between ISX’s various systems
and their SWIFT platforms. Unfortunately, it is unlikely to culminate in any operational facility with any
prospective Australian banking partner in the short-term to service ISX’s SWIFT requirements. However, the
Company will pursue opportunities to offer its Paydentity™ real time AML transactional monitoring system
to banks as part of a standalone service, or in conjunction with its APRA CPS234 compliant CORE banking
platform, Probanx™ CorePlus.