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Australia to introduce industry-wide New Payments Platform for real-time payments

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.

New Payment Platform (http://www.nppa.com.au/what-is-the-new-payments-platform/architecture-overview/)

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.

Feature: New Payment Platform Australia Youtube video