By Optus Business

We’re living in an age of ‘instant’. We expect things to happen in real-time after a click, swipe or tap – whether it’s waiting for a taxi, ordering food or watching a movie. And why should banking be any different? Sure, online banking has been around for years, enabling us to initiate various transactions from our smartphones, but we still have to patiently wait (often days) for funds to land in the destination account before the whole process is complete. What’s more, we’re burdened with entering cumbersome details correctly – notably BSB and payee account numbers. The good news is that this is changing.

Introducing the New Payments Platform (NPP)

The NPP is a world-class platform for payments innovation which can turn the possibilities presented by new ideas into real progress for Australian consumers, businesses and institutions. It’s designed to support an always-on digital economy.

Instant and easy

The NPP will enable Australians to make instantaneous payments using a simple unique identifier, known as a PayID, such as an email address or phone number. This means customers can move money between different accounts and financial institutions in real-time instead of waiting hours or days for funds to clear. The NPP also puts a much-welcomed end to the headache of knowing the recipients’ BSB and account number (although these options will still be available for anyone who prefers using them). 

BENEFITS FOR ENTERPRISE AND GOVERNMENT

• REAL-TIME PAYMENTS DELIVERED SECURELY, WITH A COMPLETE AUDIT TRAIL ✓
• NO MORE UNCASHED CHEQUES AND NO MORE CUSTOMER SUPPORT CALLS TO FIND OUT WHAT A PAYMENT WAS FOR ✓
• CUSTOMER DELIGHT WITH THE SERVICE'S SPEED AND RELIABILITY ✓

The NPP has two key parts:

1. Basic Infrastructure (BI) - the high-speed rails upon which NPP messages run in near real-time.
2. Overlay Services (OS) - the services which businesses can use to deliver a better customer experience.

The OS gives businesses greater control over defining their service levels, commercial terms, branding, governance, processes and rules allowing the experience to be uniform across the industry.

For example, a car dealer, insurer, bank, state government roads authority, or a combination of such groups, could create a service automating all the payments relating to a car – such as vehicle finance, petrol, insurance, registration and green slips. These could be linked together, creating a one-stop-shop for the customer. Separately, a toll road operator could join forces with a retailer that runs car parks to automatically link payments to license plates as a vehicle enters premises.

POTENTIAL BENEFITS OF OS FOR BUSINESS

• BETTER CASH FLOW MANAGEMENT THROUGH MORE EFFICIENT AND AUTOMATED RECONCILIATION PROCESSES.
• ABILITY TO SUBMIT BULK FILES OUT OF HOURS.
• ABILITY TO BETTER UNDERSTAND CUSTOMER BEHAVIOURS AND EXPENDITURE PATTERNS THROUGH RICHER DATA.
• IMPROVED LIQUIDITY THROUGH ABILITY TO REQUEST AND FOLLOW UP LATE PAYMENTS.
• ABILITY TO SEND FULL INVOICE INFORMATION AND RECEIVE FULL REMITTANCE INFORMATION BACK FROM PAYER ALONG WITH PAYMENT.
• ABILITY TO CONVERT LOYALTY POINTS TO CASH AT POINT OF SALE.

OS could also streamline existing financial services. For example, superannuation funds could use the system to make SuperStream payments in real-time, or the ATO could enhance its Single Touch Payroll reform allowing small business to pay PAYG withholding at the same time they pay staff while integrating data into accounting systems.

How did the NPP come about?

The NPP - a fast, flexible and data-rich system - is the result of industry-wide collaboration between Australian financial institutions, initially including 13 major commercial banks (more have since joined), as well as the Reserve Bank of Australia.

The goal was to develop a new infrastructure that helps Australians meet their current and future payment needs.

While the NPP has been tailored specifically for Australian customers, we have taken advantage of the key learnings afforded by similar models in places like the UK. 

When does the NPP go live?

The NPP is now live, but its availability will depend on your financial institution.

Make sure your contact information is up to date, and keep an eye out for any communications relating to NPP including how to register your PayID.

Is the NPP secure?

Banks already use cutting-edge fraud detection tools to detect, stop and examine unusual or suspicious payments, and with the NPP it won't be any different. Some of these protocols will be visible to users, with others working behind the scenes. The NPP is certified to the highest data security standards and monitored 24/7.

CEO of NPP Australia Adrian Lovney says the NPP’s capabilities are set to transform the way people pay.

“We know that Australians are frustrated about the amount of time it takes to move money between accounts at different banks, which can sometimes be as long as two to three days. We expect that over the next month or so, Australians will be able to transfer money instantly to each other through products like Osko by BPAY™. And they will be able to make those transfers 24 hours a day, seven days a week, every day of the year, including public holidays,” Mr Lovney said.

Learn more about the NPP.