The New Payments Platform (NPP) was officially
launched in Australia today to support the need for real-time payments of
its digital economy.
The NPP began as an industry-wide collaborative program to
develop new, fast, flexible and data-rich payments infrastructure for
Australia. Today’s launch of the New Payments Platform is the result of collaboration
between 13 members of Australia’s financial services industry, including
Australia’s four major banks and the Reserve Bank of Australia. Going forward,
a large number of additional financial institutions are expected to connect to
the infrastructure through one of the initial participants.
Services that use the Platform’s capabilities will be rolled
out soon from about 60 banks, building societies and credit unions across the
country, giving consumers and businesses the ability to transfer money
instantly between accounts at different financial institutions at any time of
day, any day of the year. They will also be able to include more accompanying
information with these payments than ever before.
SWIFT (Society for Worldwide Interbank Financial Telecommunication) has designed, built, and will operate the infrastructure behind the NPP. The solution uses local network access points to switch payments between the participating banks and the Reserve Bank of Australia. The domestic messaging channel is a point messaging solution allowing participants to exchange a high volume of messages in-country, with low latency on a 24×7 basis. The distributed nature of the switch prevents the possibility of a single point of failure in the system. The SWIFT interface deployed to each NPP participant, will orchestrate clearing and settlement flows between the participating banks and the Reserve Bank of Australis, and potentially additional flows such as payment initiations that are entered into the system by directly connected value added services (overlay services). ISO20022 will be utilised to provide XML-based messaging standards across the solution
previously, the system allows recipients to use their phone number, email
address or an Australian Business Number (ABN) to facilitate transfer of fund with
a simple addressing capability called PayID.
The CEO of NPP Australia, Adrian Lovney, said that over time
more payments products and services are likely to make use of the New Payments Platform’s
“PayID will make payments simpler because it means you don’t
have to remember, or share, your BSB and account details with others. Being
able to see the name of the person you are paying before you confirm the payment
provides more reassurance,” Mr Lovney said.
The Platform went live in November last year and has
supported funds transfers between employees at a number of different banks,
building societies and credit unions. The Platform’s public launch occurred at
12.01am, when Mr Lovney marked the occasion by making a donation to the Alannah
and Madeline Foundation Charity for Children.
“As you can imagine, rolling out something as complex as
real-time payments can’t 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. And because the
Platform can support multiple products like Osko by BPAY, and the ways in which
consumers and businesses will benefit will only grow and evolve over time,” Mr
from the BPAY Group is the first product to be developed using the Platform’s
capabilities. As it rolls out to the first wave of participating financial
institutions, it will be available through online or mobile banking
applications without the need to download an app or go to another website.
John Banfield, CEO of BPAY Group said, “Osko by BPAY is a
big step forward for Australian payments. It will make payments faster, easier,
and more convenient than ever before. With Osko, you’ll no longer have to dash
to the ATM late at night to get money for the babysitter. You’ll be able to pay
them on the spot in under a minute, in your secure banking environment, 24 hours
a day, seven days a week.”
“Most Australians will be able to use Osko in the next few
months as it rolls out across financial institutions. Each institution will
tailor the experience to best meet the needs of their customers. They will all
make payments to a PayID possible within Osko — which makes using Osko even
easier,” Mr Banfield added.
The federal government welcomed the launch of the new platform. The Hon Scott Morrison MP, Treasurer of the Commonwealth of Australia said, "The launch today complements the Government's FinTech agenda, and I look forward to the development of other NPP services that will add even more convenience, functionality and efficiency to how individuals and businesses make payments."