Who is Cuscal?

Headline:  Who is Cuscal and why did they withdraw support from Binance-AUS?

I remember back in the early days of E-bay, one had to send a paper check by mail before the item was shipped.  Now there’s Paypal and SquareTrade.  This makes payments much easier to make a quicker to process.  But, as HUGE as Paypal is, it is not a Bank.  It is a payments processing mechanism.    CUSCAL seems to be an Australian version of PayPal. 

In fact, they have a rather impressively long  history, since the 1970s.

  • 1977. Launched Australia’s first ATM, in collaboration with Queensland Teachers’ Credit Union**.
  • 2012. Started switching transactions for all our clients through our own payment switch.
  • 2014. Acquisition of Strategic Payments Services Pty Ltd (SPS) on 13 November.
  • 2018. Inaugural Curious Thinkers client conference.
  • 2020. Open Banking Collaborative Data Exchange.

So, they have an impressive track record.  What are they doing in the future?

Binance Australia on May 18 announced it would be suspending Australian dollar fiat services in Australia after a decision from a “third-party payment service provider” — this turned out to be a financial services company Cuscal.   “Following recent media attention in relation to the impact of scams and fraud in Australia with particular focus on account fraud, ID takeover and crypto activity, Cuscal reiterates its commitment and important role in identifying and implementing detection services for our clients across the Australian payments system,” a statement from Cuscal wrote.  Binance said Zepto and Cuscal are continuing to support users wishing to withdraw Australian dollars.  And it would appear that Bank  of America will be responsible for managing the distribution of funds.

This all seems like some pretty great surprise because Cuscal seemed to be doing well, until recently.   The company had revenues of $182 million in the last financial year, and has grown net profit at 12 per cent over the past 10 years on a compounded basis. Cuscal reported net profit after tax of $23.4 million for the year to June 30.  Potential shareholders are being  encouraged to think of Cuscal as providing necessary financial infrastructure, and thus being robust enough to believe in.

In March, Cuscal acquired Basiq, a Sydney-based start-up backed by investors including Westpac and National Australia Bank.  Following completion of the deal, Basiq will continue to operate as a stand-alone business within the Cuscal Group, while it is expected that there will be no material change to the current structure of the team at Basiq or to Cuscal’s regulated data business.

The Verdict

A very fair question is, “Who cares?”     This is important because Binance seems to be on the ropes in so many countries.   It seems to be under substantial scrutiny in the US, and now, it is being severely pressured in Australia.    I am not sure how long Binance will be able to continue in operation.   This is significant, as  FTX is gone and the owner is facing federal charges.   Signature Bank (helped Binance get on the SWIFT network) is pulling its support, mostly, and Silicon Valley Bank is gone completely, and they were the holders of large amounts of cryptocurrency, and fiat money to back up fintech firms.  Gemini appears to be having their own problems.  We might well be down to 1 or 2 centralized exchanges for cryptocurrency.    This could be very interesting.


ASX float looming: payments group Cuscal appoints Bank of America as lead manager (afr.com)

Binance Australia partner hints at rising ‘scams’ after debanking exchange (cointelegraph.com)

Australia’s Cuscal acquires Open Banking platform Basiq | Open Banking Expo

Meet the CEO of one of Australia’s fastest growing unicorns – Forbes Australia

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.