The New Payments Platform and what it will mean for you
The New Payments Platform is a 24x7 payments network connecting all the major Australian banks and many other financial institutions. It's aims are to provide a faster settlement and a richer set of services than the current 1-2 days taken to transfer funds between institutions. The rollout of the NPP is being managed by KPMG and NPP Australia Limited, an organisation set up by the Australian Payments Clearing Association, using technology from SWIFT. The design of the NPP is underway now, with initial testing of services to be conducted in 2016 and final implementation expected by the second half of 2017.
Along with near real time settlement of fund transfers, NPP enables a number of additional services. Rather than the current limited 14 character message on a transfer, complex and significant documentation can be associated with a payment and communicated through the network, supporting activities such as property settlement. The "Request to Pay" service allows an invoice transaction to be sent to another party that they may respond to with a payment. The "Simpler Addressing" service allows an account to be associated with identifiers such as an email address, Australian Business Number or mobile phone number, making payments more intuitive. The initial services offered in NPP can be built upon in the future, providing a platform for new "overlay" services.
The founding members of NPP Australia are:
- Australian and New Zealand Banking Group Limited
- Australian Settlements Limited
- Bendigo and Adelaide Bank Limited
- Citigroup Pty Ltd
- Commonwealth Bank of Australia
- Cuscal Limited
- Indue Limited
- ING DIRECT
- Macquarie Bank Limited
- National Australia Bank Limited
- Reserve Bank of Australia
- Westpac Banking Corporation
Other members can join the network at a later date, or make use of gateway services provided by third parties.
The NPP will allow a faster and fairer execution of payments from mobile devices, and have the funds in the hands of the recipient quicker. Businesses will have smoother cashflow resulting from reduced wait times for funds to clear. The handling of long BSB and account numbers will no longer be necessary. Payments will be processed around the clock, supporting the next generation of digital financial services.
Ben Stringer is the Principal Consultant at Syntegrity Solutions, a consultancy specialising in Integration, APIs and Identity Management. He has over 25 years of experience in the IT industry, and enjoys working with customers from many different industries on their integration and API projects.