Australian new payment platform launches to the public
The new payment platform (NPP) in Australia has officially launched today to the public, writes Neil Ainger, enabling businesses and consumers to transfer money instantly between banks in real-time on a 24×7 basis.
Around 60 banks, building societies and credit unions across Australia will eventually connect to the platform as the migration speeds up. The public launch today follows a trial in November last year involving employees at key financial institutions (FIs).
The NPP comes with ISO20022 messaging, which enables data-rich overlay services to be offered by pioneering banks and easier mobile functionality. The PayID addressing service is one such instance whereby a mobile phone number or email can be used, instead of a bank account number, to make a payment.
NPP Australia (NPPA) is the backbone company formed in December 2014 to oversee the build and operation of the new platform. It is mutually owned by the initial 13 large participating banks such as ANZ, Westpac and Commonwealth Bank of Australia (CBA), among others, who are to the fore of today’s rollout. Participant banks connect to the core, as they do in other nations that have moved to instant payment (IP) schemes, such as Denmark, Sweden, Singapore and so on.
The project was first brought into being by the Reserve Bank of Australia (RBA), a user of the system, in 2012 after a strategic review deemed it necessary. SWIFT and its contractors did the build from 2014 onwards, with some delays, under the auspices of the NPPA.
The new infrastructure includes an RBA mandated Fast Settlement Service (FSS) to allow transactions to be settled individually on a 24×7 constant operational basis, in a matter of seconds, as close to real-time as it is possible to get. Line-by-line settlement is a differentiator for the system and means the country’s banks can move more easily away from a batch-based payment processing procedure.
Adrian Lovney, CEO of NPP Australia, said in a statement: “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 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.”
“As you can imagine, rolling out something as complex as real-time payments cannot simply happen overnight – it needs to be carefully planned. 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.”