How the NPP could lead to more payment innovations
Real-time payments without the need for account numbers are just the start of what we can expect from this new tech.
The New Payments Platform (NPP) is designed to offer faster payments for individuals and businesses through a high-tech platform that’s been collaboratively developed by NPP Australia Ltd and 13 financial institutions.
While it will work alongside current payment options, the NPP also aims to “meet the evolving needs of a 24/7 digital economy” by providing fast, secure and data-rich payment solutions. NPP CEO Adrian Lovney said the platform also gives financial institutions, fintech companies and others an opportunity to develop their own unique services.
“The NPP will provide a platform for product innovation over time,” he said, explaining that it had been developed in a way that allows “innovative products and services to be built ‘on top’ of the Platform and leverage its speed and data capabilities.”
BPAY’s real-time payments service Osko is a prime example. Set to launch in early 2018, it gives you a way to send and receive money 24/7, regardless of which bank you’re with. Lovney explains you’ll be able to use Osko “via your financial institution’s usual Internet or mobile banking app.”
You can imagine using this service to pay a babysitter [or] a plumber on the weekend or [for] buying goods on apps like Gumtree, instead of using cash,” he said.
Another flagship service using the NPP is PayID, which gives you a way to get paid or pay someone without sharing account numbers.
“When using PayID with a service like Osko… you will be able to create a PayID using information that is easy to remember, like your phone number, that you can securely link to your bank account. Then when you want somebody to pay you, you can give them your PayID instead of your BSB and Account number.”
This process also includes a confirmation of the payee before payment is made, which Lovney said will “reduce mistaken and misdirected payments.”
A platform for innovators
Both Osko and PayID play key roles in the initial launch of the NPP in 2018 and show the potential benefits banks and other payment companies can get from using the platform to develop their own tools and services.
“In the longer term, it’s likely we will see more innovators use the Platform’s capabilities to offer innovative and competitive payments experiences, and the possibilities are endless,” Lovney said.
We see the New Payments Platform as an exciting basis for competition and innovation.”
While the NPP has the potential to enhance both Internet and mobile banking for everyday Australians, it won’t necessarily lead to the death of existing payment options such as cash or cards.
In fact, when the question of whether mobile payments would be the death of cards came up at Intersekt’s recent Collab/Collide summit in Melbourne, Lovney’s first response was a firm “no.”
“The [mobile payments] experience is not demonstrably better,” he said, adding that “you still have to carry a wallet” for ID and many other things.
“The experience can be better but at the moment it’s not materially different. So we’re going to see cards for a while yet.”
So instead of a quick shift from our cards and cash, the introduction of the NPP and new payment options that come with it are expected to gradually change the way we make payments and get paid.
“Speed will be a key differentiator, as will the convenience offered by PayID and the data that can be transmitted along with payment,” Lovney told finder.com.au.
“It’s likely we will see a focus on business applications, as well in industries such as funds management, insurance, in and around the stock exchange or superannuation.”
Want to learn more about the NPP? Visit our NPP hub for the latest news and insights on the platform.