Published: March 21, 2018
The mass adoption of real-time payment systems around the world is creating a new norm for the way we pay and get paid. Today, consumers, businesses and public institutions expect faster settlement periods, better reporting and more options at their fingertips. With the launch of the New Payments Platform (NPP) in February 2018, Australia is the latest country to join the real-time payments revolution.
We had a chance to speak to Katrina Stuart, Executive Manager, Engagement at the NPP to speak about the recent launch of the platform.
What do you think will be the biggest indicators of a successful implementation for the NPP?
First and foremost we’re looking for proactive adoption and usage of NPP’s addressing service, PayID, and the initial P2P service, Osko. As a key part of the platform, PayID simplifies payments by allowing people to create easy to remember aliases like a phone number or email address that can be securely linked to a bank account. Transferring funds into someone else’s account, can be done by simply providing them with a PayID instead of a long, complicated account number. This is part of the core platform infrastructure that will be available for Osko as well as any new overlay services.
Already, a significant number of financial institutions and a diverse range of players in the market are using the platform. Currently, we have around 60 financial institutions offering NPP payments to their customers, including most of our co-founding financial institutions, as well as smaller players such as credit unions, building societies and smaller regional banks. We’ll also be looking at what proportion of accounts are reachable via the NPP. At the moment, the platform is reachable by close to four out of every five bank accounts in Australia, and within the year, we’re hoping that this reach extends to 90 per cent.
One of the key things that we executed early on our journey was a coordinated industry campaign around PayID. We placed a lot of importance on explaining how the service will alleviate some of the friction around payments, while also assuring the public that it is a legitimate and secure service provided by banks. Working closely with our participating financial institutions, we made sure that the messaging surrounding the NPP was consistent and informative.
In a recent study with EY, we found that Canadian businesses are spending $2.9 to $6.5 billion annually to process payments. How do you think the NPP will help Australian businesses?
We see the NPP delivering a lot of value to businesses both small and large across the country. The global messaging standard ISO 20022 allows for more data to travel with payments - meaning that a company could integrate more data into their accounting software or payroll system, allowing for e-invoicing and more automated processes.
We’re also looking at how we can help support initiatives like the Australian government’s one-touch payroll. This would mean that when a salary payment is made to an employee, the employee’s superannuation payment would be deposited into their account, while their tax information is simultaneously sent to the government. We’re currently looking at how the NPP can drive some of these efficiencies, reduce reporting burdens, and make company’s day-to-day operations more efficient.
How are you educating consumers about the benefits associated with real-time payments?
Like most real-time payments campaigns, we focused a great deal on security. In real-time payments system launches, we don’t necessarily see new types of fraud - but obviously money moves faster in a real-time environment.
Getting the word out to the public and driving adoption around other benefits is really in the hands of banks here in Australia. Their communication and marketing efforts are very critical in the early days to help drive early adoption of the platform. Banks have already started going out to their customers via their communications channels to disseminate messaging - meaning that people are starting to see information about the NPP in their mobile banking apps and online banking platforms. Hopefully, this will ultimately drive education and adoption of the NPP. Certainly if early indications are anything to go by, we are off to a great start!
To learn more about Payments Canada’s Modernization initiative visit payments.ca/modernization. For an in-depth view of the target end state for payments modernization please the Modernization Target State whitepaper.