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A Guide To The New Payments Platform (NPP)
●May 14, 2021●4 minute read
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What is the New Payments Platform (NPP)?
Launched in February 2018, the New Payments Platform (NPP) is an open access payment infrastructure. Developed by NPP Australia Ltd and 13 Australian financial institutions, the platform allows faster, near real-time and data-rich payments for Australian consumers and businesses. The system operates 24/7, 365 days a year with no public holiday or weekend breaks.
The NPP also allows businesses to utilise the infrastructure’s technology to build and develop an ‘overlay’ service. This allows them to deliver innovative payment services to end-users. An example of this is Osko, the first ‘overlay’ service of the NPP.
Why was the NPP introduced?
In June 2012, the Reserve Bank of Australia (RBA) released the The Strategic Review of Innovation in the Payments System. It established strategic objectives to improve and modernise the Australian standard electronic payments system. The RBA called on the banking industry to collaborate and determine how to achieve these objectives. Some of the objectives included:
- The ability to make real-time payments;
- The ability to send and receive payments outside normal banking hours;
- The ability to address payments in a relatively simple way;
- The ability to send more complete remittance information.
As a result, the RBA worked with 12 financial institutions (including the big four banks), to develop what’s now known as the NPP infrastructure.
What are the benefits of the NPP?
A major industry initiative, the NPP was developed to benefit Australian consumers and businesses through offering near real-time payments, data-rich payments, and simpler identification. We will go into more detail about these benefits below:
Long gone are the days when you would have to wait two to five business days for funds to transfer to your bank account. The NPP allows Australian businesses and consumers to send and receive near real-time transfers from one bank account to another. As the NPP operates 24/7, you can send money outside of business hours, during weekends and public holidays. The instant transfers are facilitated by the RBA-owned Fast Settlement Service.
The NPP has allowed for data-rich payments, with Australians able to use up to 280 characters including emojis for their transfer descriptions. As a result, customers and businesses can have a timestamp, record of transactions, and track their spending.
Can’t remember your BSB and account number off the top of your head? With the NPP and it’s overlay service, PayID, you can now use easier banking identification. For example, you can use your mobile phone number, email address, or ABN, instead of your BSB and account number as a form of ID.
What is PayID and Osko?
PayID is a unique identifier, such as a mobile phone number or email address, that is linked to your bank account. This means you don’t have to remember your BSB or account number and helps make the payment process a lot simpler. While an email address or phone number is easier to provide, you can also use an ABN as an identifier.
Launched in 2018, Osko was the first ‘overlay service’ to use the NPP infrastructure. Created by the makers of BPAY, Osko facilitates near real-time payments 24/7 between participating financial institutions.
Which banks use the NPP?
Since its launch in 2018, more than 60 financial institutions in Australia have joined the NPP and offer real-time payments through PayID and Osko. Here’s a full list of which financial institutions use the NPP (as of May 2021):
- Australian Military Bank
- Australian Unity
- Bank Australia
- Bank First
- Bank of Melbourne
- Bank of Us
- BDCU Alliance Bank
- Bendigo Bank
- Beyond Bank Australia
- Border Bank
- Community First
- Credit Union SA
- Defence Bank
- Easy Street Financial Services
- Endeavour Mutual Bank
- Family First Credit Union
- Firefights Mutual Bank
- G&C Mutual Bank
- Goulburn Murray Credit Union
- Greater Bank
- Heritage Bank
- Horizon Bank
- Hume Bank
- Hunter United
- Illawarra Credit Union
- imb Bank
- Macquarie Bank (only PayID)
- Newcastle Permanent
- Nexus Mutual
- Northern Inland Credit Union
- Orange Credit Union (only Osko)
- P&N Bank
- People’s Choice Credit Union
- Police Bank
- Police Credit Union
- Qudos Bank
- Queensland Country Credit Union
- RACQ Bank (only PayID)
- Regional Australia Bank
- Reliance Bank
- Rural Bank
- Service One Alliance Bank
- South West Credit Union
- Suncorp (only Osko)
- Teachers Mutual Bank
- The Mac
- The Mutual
- Unity Bank
- UP Bank
Is it safe to use?
As with any new technology, it’s understandable if you’re wondering about how safe it is to use the NPP. As stated on the NPP’s website:
“The platform was designed and built with security and fraud front of mind. The central infrastructure is certified to the highest data security standards and monitored 24-hours-a-day, seven-days-a-week.”
Osko by BPAY uses the RBA’s Fast Settlement Service and has built-in fraud screening. This means that if there’s potential fraudulent behaviour, the payments will slow down so they can respond to the situation quickly. For PayID, your funds are protected by your bank’s fraud screening system. Plus, the only way to access your PayID service is to log into your bank account via mobile or Internet.
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Written by Katie Douglass
Katie Douglass is the Senior Communications Manager at Jacaranda Finance. In recent years, Katie’s work has appeared in publications such as Marie Claire, InStyle, Oiyo, and THE ICONIC. She has a Bachelor of Creative Industries in Fashion Communication & Journalism from the Queensland University of Technology.