Ironically, this comes just two days after the launch of real-time electronic bank transfers in Australia. Read more…
The New Payments Platform (NPP) is a world-class payments infrastructure transforming the way Australians transact. Now officially launched to the public, the NPP provides real-time funds transfers and a host of other benefits to consumers, businesses and government departments.
More than 60 additional financial institutions are set to bring customers onto the NPP in the coming months.
Which banks have real-time payments with the NPP using PayID?
- CommBank - Yes, launched to customers
- Westpac - Not yet, will be staging the roll-out in the coming weeks
- NAB - Not yet, will be staging the roll-out in the coming weeks
- ANZ - Not yet, currently testing the service
The latest on the New Payments Platform
What is the NPP?
The NPP is a completely new payments infrastructure for the Australian economy, which launched on Tuesday 13 February 2018. An initiative of the banking industry, it provides fast, flexible and data-rich payments to individuals and organisations. The platform was developed by NPP Australia Ltd and 13 financial institutions.
What does the NPP allow me to do?
Under the NPP, households, businesses and government agencies can send and receive faster, data-rich payments.
This means you can send near-instant money transfers from one bank account to another, with real-time clearing and settlement available 24/7. No longer will you have to wait for funds that have been transferred to you to clear and be available in your account, ready to use.
The “data rich” bit means you can attach longer descriptions to your payments. Instead of using all sorts of acronyms and abbreviations to squeeze a long description into the available character limit, you can clearly detail what a payment is for.
How does it benefit consumers?
In our 24/7 digital economy, we expect things to happen fast. So when we transfer money to someone else, we want it to happen straight away.
The NPP makes this a reality for Australian consumers, providing convenience and freedom for a wide range of personal transactions. When a friend promises to transfer funds to your account to cover their share of a restaurant bill, that money will appear in your account and be ready for use almost instantaneously. If you want to send money to a relative interstate to help them pay an urgent bill, you can get them the funds they need straight away.
It’ll also be much easier to send payments. Instead of exchanging hard-to-remember BSBs and account numbers, you can identify a transaction account by a simpler payment address, such as the account holder’s email address or phone number.
BPay's Osko platform is a great example of how the NPP could benefit you. The service allows you to pay bills in real-time, send a 280-character description with each transfer and identify payees by their email address or phone number (known as their PayID). Several banks have already launched PayID using Osko, with more that 60 financial institutions rolling out the service in the coming months.
How does it benefit businesses?
Businesses can also enjoy a number of important benefits with the NPP. For starters, you can pay your contractors and suppliers quicker, which will help you get things done faster. This not only means increased efficiency, but allows you to manage your cash flow more effectively.
The NPP also simplifies complex payments, allowing you to quickly and easily transfer funds to many bank accounts. Instead of relying on BSBs and account numbers to identify transaction accounts, you can use an ABN, email address or phone number to identify an account. This is known as your PayID. You can even include more information than you previously could under the current character limit, with the ability to add more text or even link to external documents or add emoticons.
Finally, the NPP also allows the addition of overlay services, which can tap into the NPP infrastructure to deliver a wide range of benefits in much the same way that third-party apps can take advantage of the capabilities of your smartphone.
Overlay services could be used to simplify and speed up a range of common transactions, such as buying a car or house. With the ability to send more information about a transaction when you transfer the funds to make a purchase, paperwork (ie, the transfer of a car registration) could be lodged with the relevant authority much more quickly.
Is my bank part of the NPP?
Thirteen financial institutions have worked together to develop the NPP, including:
- Australia and New Zealand Banking Group (ANZ)
- Australian Settlements Limited (ASL)
- Bendigo and Adelaide Bank
- Commonwealth Bank of Australia
- HSBC Bank Australia
- ING Direct
- Macquarie Bank
- National Australia Bank (NAB)
- Reserve Bank of Australia (RBA)
- Westpac Banking Corporation
Of these, so far only CommBank, NAB and Westpac have launched the service, enabling their customers to send money instantly to recipients with accounts at different banks. ANZ has stated it is still in testing and will offer real-time payments soon.
Over 60 financial institutions have partnered with the NPP to offer real-time payments using PayID and Osko, so your bank could offer the service over the coming weeks and months.
What do I need to do?
If your bank has launched PayID using Osko, here's what you need to do:
- Update your details. Make sure you personal details and contact details are all up to date with your bank
- Set up your PayID. When invited to do so by your bank, set up your PayID through your Internet or mobile banking. Make sure you select somethign easy to remember and unique to you, such as your mobile phone number.
- Start using PayID. When your bank launched the service, you can start to share your PayID with people to receive payments instantly.
If you’re a customer with one of the 13 banks that helped develop the NPP, you can expect your bank to start supporting payments on the NPP very soon, if it doesn't already. If you’re not with one of the institutions listed above, you may want to get in touch with your bank to find out when they’ll be rolling out the NPP.
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