Australia to introduce industry-wide New Payments Platform for real-time payments
Australia is expected to launch the New Payments Platform (NPP) in early 2018 to support the need for real-time payments of its digital economy.
The NPP is a new national infrastructure to support payments between business accounts and customers at different financial institutions in Australia. It aims at providing fast, versatile, data-rich payments any time and any day.
First announced by the Australian Payments Clearing Association (APCA) in 2013, the NPP began as an industry-wide collaborative program to develop new, fast, flexible and data-rich payments infrastructure for Australia. It is also a response to industry calls for payment innovations and a more modernized payments system for Australia.
Designed to support the growing digital economy and its need for efficient payment, the NPP supports near real-time payments clearing and settlement. With a simple addressing capability called PayID, it allows recipients to use their phone number, email address or an Australian Business Number (ABN) to facilitate transfer of funds.
According to information on its official website, the NPP is underpinned by 4 key features: (1) speed and ability to make payments in real time, with close to immediate funds availability to the recipient, (2) 24/7 availability which enables payments to be made and received even outside normal banking hours, (3) data enriched as more complete remittance information could be attached to payments, and (4) simple addressing which is enabled by the PayID system using common identifiers.
The Platform is collaboratively development by 13 participating financial institutions: the Australia and New Zealand Banking Group (ANZ), Australian Settlements Limited (ASL), Bendigo and Adelaide Bank, Citigroup, Commonwealth Bank of Australia, Cuscal, HSBC Bank Australia, Indue, ING Direct, Macquarie Bank, National Australia Bank (NAB), Reserve Bank of Australia (RBA), and Westpac Banking Corporation.
NPP connects the participating financial institutions with the Reserve Bank of Australia’s (RBA) Fast Settlement Service. This direct connection with the RBA allows for real-time settlement between the participating financial institutions.
Central infrastructure of the NPP has been live since November 2017 between employees at the participating financial institutions. Services to the public will be launched by participating financial institutions in early 2018. It is expected that over 50 banks, credit unions and building societies will be connected to the platform when it launches in early 2018.
Upon its launch, the Platform is expected to reach about 4 in 5 accounts in Australia and will expand their reach with time.
The Platform will be supporting Overlay Service Providers (OSP) which are innovative and tailored products and service that tap on the Platform’s Basic Infrastructure capabilities. Its base infrastructure is built by Fiserv and Swift.
The first OSP on the NPP is Osko by BPAY. It allows customers to make and receive faster payments via and participating financial institution any time and any day. Most payments made through Osko only takes less than a minute.
In terms of its architecture, the NPP uses ISO 20022. According to information on the NPP website, the International Organisation for Standardisation (ISO) format is used for electronic data interchange between financial institutions or organisations able to move money and data. It is a global standard with messages able to convey more data than most other messaging formats.