After nearly six years in development with 13 leading stakeholders, Australia’s “world-class” payments platform has officially gone live.
The billion-dollar New Payments Platform (NPP) allows for payments to be send in real-time by people with different bank account, acting as the “secure set of rails” between the institutions.
But the Commonwealth Bank is currently the only big four bank to fully sign up to the platforms, with the others gradually signing onto it and continuing tests.
The NPP was developed by the federal government and leading members of the financial services industry, including the big four banks and the Reserve Bank of Australia. It was tested from November last year with employees of the big banks and has now be opened up to the general public.
The platform is based on infrastructure built by Fiserve and Swift that financial institutions can connect to, allowing payments between customers in real-time, at any day.
The platform offers PayID, which means you’ll no longer need to get someone’s BSB and account number to transfer money, instead linking a bank account to an email address, phone number or business number.
The platform also allows for other services to run on top of it, with BPay’s Osko the first to do this. Osko allows users to transfer money to someone else via a mobile phone number of email address in real-time, and include a 280-character description along with it.
NPP CEO Adrian Lovney said the aim is the put the consumers first.
“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,” Lovney said.
“We expect that over the next month or so, Australians will be able to transfer money instantly to each other through products like Osko. 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.”
RBA governor Philip Lowe said the launch is a major milestone.
“The public launch of the NPP represents the delivery of a major piece of national infrastructure,” Lowe said.
“I would like to thank everyone who has been involved in the NPP project and I look forward to the payment innovations it will make possible, and the benefits this will generate for all Australians.”
All of the big banks apart from ANZ have committed to rolling out the platform in the near future, but only Commonwealth Bank customers can use it fully now. These customers can register their mobile phones as their PayID through the Commonwealth bank application.
“We are pleased to be one for the first Australian banks to offer our customers a way to receive and make payments near-real time from other financial institutions,” Commonwealth bank executive general manager Pete Steel said.
“We are committed to delivering a safe, high quality option to our customers. We have offered instant payments between our customers for some years now and we look forward to seeing the take up across the industry now that the platform has launched.”
Westpac said this will be available for its customers “in the coming weeks”, while NAB said it will “within the next month”. ANZ is taking a more cautious approach, saying it is undertaking “rigorous testing” of the platform before fully signing onto it.
“Rolling out something as complex as real-time payments can’t simply happen overnight - it needs to be carefully planned,” Lovney said.
“We do expect that within about a month after launch around four in five Australian accounts will be connected to the platform, through a wide and diverse range of banks, building societies and credit unions. And because the platform can support multiple products and the ways in which consumers and businesses will benefit will only grow and evolve over time.”
PayID will also make things a lot easier for consumers, Lovney said.
“PayID will make payments simpler because it means you don’t have to remember, or share, your BSB and account details with others,” he said.
“Being able to see the name of the person you are paying before you confirm the payment provides more reassurance.”