UPI Fee Model Variables

DSB operates on a cost recovery basis where annual user fees recover the UPI Forecast Total DSB Cost. Annual user fees are derived using a fee model calculation which comprises the variables UPI Forecast Total DSB Cost, Number of Infrequent Users, Number of Standard Users, Search Only API Users and Number of Power Users fixed no later than the end of the first Working Day in December each year, as per the DSB Charges Policy.

2023-2024 UPI Fee Model Variables

Given the UPI Service launch in Production on 16 October 2023, the DSB has estimated the Number of Users per User Type for the 2023 and 2024 invoicing periods based on a market sizing exercise and stakeholder outreach. Further details can be found in the UPI Fee Model Variables and Annual User Fee Update, published September 2023. The below UPI Fee Model Variables table will be updated quarterly:

2023-2024 UPI Forecast Total DSB Cost (1 Jan 2024 – 31 Dec 2024)

Fee Variable	Estimated user numbers as at 4 Sep 2023	Values as at 31 Dec 2023
2023 UPI Forecast Total DSB Cost	€9.29m	€9.29m
Number of Infrequent Users	102	22
Number of Standard Users	60	17
Number of Search Only API Users	15	16
Number of Power Users	120	53

Annual user fees recover the DSB overhead costs which include a 20% margin for financial sustainability. The 2023 UPI Forecast Total DSB Cost includes the UPI Build Costs for the period 2020-2023, Forecast Time-Limited Costs (amortisation of Capex, 2022-2023 Opex and Financing costs) and the recurring Forecast Annualised Operating Expenditure for 300 users.

In accordance with the DSB Charges Policy, Excess Fee Income resulting from additional contracts as well as operating cost efficiencies, go to defraying the UPI Forecast Total DSB Cost for the contract year following the audited statutory accounts.

The tables below show the breakdown of the 2023-2024 UPI Forecast Total DSB Cost upon which the 2023-2024 UPI annual user fees have been calculated and includes the 20% margin for financial sustainability.

The tables contain two columns of costs, firstly relating to the annual period 1 Jan 2024 – 31 Dec 2024, and secondly for 16 Oct 2023 – 31 Dec 2024 (from the date of the UPI Service launch in Production).

Recurring Forecast Annualised Operating Expenditure (Opex) for 300 users:

Category (Recurring)	Description	1 Jan – 31 Dec 2024	16 Oct 2023 – 31 Dec 2024
Technology & Operations	Operation of the UPI Service through the DSB platform including technical and asset class support	€3,500K	€4,374K
Management	Senior management team including MD, Managed Service Provider management team and CFO	€403K	€504K
Administration	Administrative costs and overheads such as office space, and administrative support functions	€419K	€524K
External consultants	External oversight, legal, professional & communication	€230K	€288K
Third-party data	Provision of third-party reference data	€659K	€823K
Contingency	Contingency to cover unplanned costs to support the service once rolled out	€385K	€481K
Previous Year Operating Expenditure Adjustment	Excess Fee Income reduction based on the DSB Statutory Accounts from prior period (N/A given the 2023 launch of the UPI Service)	N/A	N/A
Total		€5,595K	€6,993K

Forecast Time-Limited Costs (amortisation of Capex, 2022-2023 Opex and Financing costs):

Category (Time-Limited)	1 Jan – 31 Dec 2024	16 Oct 2023 – 31 Dec 2024
Amortised 2022-23 Opex	€694K	€867K
Forecast Capex Amortisation	€2,350K	€2,937K
Financing Costs	€654K	€818K
Total	€3,698K	€4,622K

Amortisation Analysis

1. Forecast Capex Amortisation

DSB Build Costs / Capital Expenditure (Capex) are amortized over 4 years, starting from the year after the service/functionality goes live (i.e. 2024-2027), as approved via industry consultation. On this basis, Build Costs are funded by the DSB’s financial sustainability margin with 25% of the cost incorporated into the cost basis for the four years following build of the service/functionality. Build Costs are based on the known evolution of the service which is driven by industry consultation. Therefore, Build Costs / Capex for 2024 onwards will be provided when details are known.

2. Amortised 2022-23 Opex

The operational expenditure (Opex) incurred up to 31 December 2023 is also amortized over 4 complete years from 2024-2027. This is to ensure a fair distribution of costs across the broadest user base, and to not disadvantage early adopters.

3. Financing Costs Amortisation Analysis

This is the cost of financing the Capex (Build Costs), to be repaid over 4 years (2024 –2027). Annualised interest represents the total interest from the start of the build phase to the date these costs are fully repaid (2027). The total has been split over 4 years, as per DSB amortisation policy.

Amortisation Analysis Summary

The below table provides an overview of the amortisation for the period 2023-2027:

Amortisation Analysis	Estimate 2023 16 Oct 2023 – 31 Dec 2024	Forecast 2024 Annualised	Forecast 2025 Annualised	Forecast 2026 Annualised	Forecast 2027 Annualised
Amortisation of Forecast Capex, 22-23 Opex and Financing Costs	€4,622K	€3,698K	€3,886K	€3,698K	€3,698K

*The DSB is committed to maintaining the financial reserves up to the value of 6 months of operating costs. The increase in the amortisation amount in 2025 versus the annualised amount in 2024 is due to collecting the financial sustainability margin required to reach this limit. No financial sustainability margin is applied from 2026 onwards, on the assumption that no further build-up of reserves will be required.