The wait is over, after 4 years in the making and months of delays the New Payments Platform is finally here! What is it and what does this mean for your business?
- Real-time movement of money
- Simpler, smarter addressing (PayID)
- Data-rich capability (ISO fields)
- Always available 24 hours a day, 7 days a week
Before we jump into the new, let’s look back at the old.
For the past 40 years, Australian businesses have used direct entry (ABA) files to create payments electronically. This system only works Monday to Friday, during ordinary business hours and with batch file settlements. It is a fundamentally closed system with limited data able to be transmitted with the payment- just 18 characters of alphanumeric text.
The New Payments Platform (NPP) will transform the way people pay each other. With 10 banks and more than 60 financial institutions in Australia connected directly to NPP, it has reached critical mass.
Click here to find out if your financial institution is on board.
The NPP is a new infrastructure for Australian payments. It enables the real-time movement of money 24 hours a day, 7 days a week. Public holidays, weekends, late at night, all in less than 60 seconds. It won’t even be taken offline for maintenance. For small business this can mean the ability to submit payments out of hours or meet your BAS payment deadline as you organise payment over the weekend.
The NPP has data rich capabilities with unlimited data able to be transmitted with the payment, including emojis. This will streamline account reconciliations as real-time payments come into your business' ledger with meaningful descriptions. You can write a short essay or even include links to documents.
You may have already seen or heard the advertisements for PayID and Osko - these are two key features of the NPP.
What is PayID?
It is a simple identifier which can be used to make and receive payments. It can be your mobile number, business name, email address, ABN or other forms of identification. By linking this identifier to your bank account, you can quote this instead of having to remember your BSB and account number. All you need to do is register a PayID with your financial institution.
When you enter a PayID in online banking, the name of the individual or entity linked to the PayID will be displayed, this will reduce the risk of misdirected payments and should help mitigate fraud.
By making it easier and more convenient for customers to pay this can also help your business’ cash flow by getting paid faster.
What is Osko?
Built by Bpay Group, it is the first ‘overlay service’ that the new payments platform has gone live with. It demonstrates the basics of what the platform can do-facilitating fast, data-rich payments. You may already be using Osko with online banking.
The possibilities are endless for value-add 'overlay services'. No doubt we will see more and more going live in the coming months. Such services could include electronic invoicing, payment request services or superannuation payments.
Despite the slow start the NPP has arrived to most financial institutions and is a significant development for the Australian economy. The potential to create efficiencies in your business by utilising further innovations and competition in ‘overlay services’ cannot be underestimated.
For more information on the New Payments Platform
If you have any questions or require further information regarding the New Payments Platform, contact your local RSM office today.