The emergence of the Internet has accelerated Australia’s adoption of a 24/7 business cycle. An around-the-clock payment system that directs payments to its recipients in less than a minute is a significant boost for small business and the economy as a whole.
Experts are hoping the NPP’s real-time payments infrastructure will help accelerate Australia’s economy and transition it into a data-rich digitally enabled environment.
What Is The NPP Australia?
Designed specifically around the low-value payment segment which is experiencing high-growth, the NPP Australia enables customers, businesses, and other participating organisations to make and receive payments without the limitations imposed by the current bank-driven payment network.
This secure system will connect financial institutions, including banks, credit card providers, and third-party payment processors including PayPal to consumers and business operators.
Payments made via the NPP will be data-rich. Payers and payees will receive a timestamp to record the transaction, together with a record of the flow of currency and other information related to the transaction.
For their part, businesses will have access to a deep pool of data to monitor the acceptance rates of their products and services, while consumers will be able to track their recurrent spending patterns.
Why Should We Care?
Launched on Tuesday, 13th February 2018, the NPP allows customers of up to 60 financial institutions, including the major banks, Commonwealth Bank, National Australia Bank and Westpac to send and receive payments between participating banks almost instantly.
What makes NPP Australia so potentially important to the future buoyancy of the Australian economy is the stimulus the rapid transfer of funds provides to business and consumers alike. Capital that moves through the economy more rapidly, works harder and is more productive.
Rather than tying liquidity up in slow clearing bank payments system the economy as a whole benefits from having that liquidity continually at call. Payees will be able to access their funds almost as fast as they receive payment.
With the NPP, even when payees and payers have accounts in different banks, the system frees up funds nearly as quickly as the payment is electronically processed.
Instant payment and an almost instant access to funds without the hassle and extra fees demanded by platforms such as PayPal will create a more efficient financial backbone for business and consumers.
Customers looking for a more convenient method of paying for their goods, services and existing bills are embracing the NPP. A centralised payment platform, which enables them to pay for practically anything is simplifying their lives by freeing up time they would have otherwise spent paying bills the old-fashioned way. There is even a mobile option for customers who prefer making on-the-fly payments.
All consumers have to do to link their account with the NPP is register with a service called ‘PayID’. This creates a seamless, simplified payment process replacing the previous BSB or account number-based bank system.
Businesses and enterprises looking to optimise their financial resources can now receive payments from customers and have the money accessible in their accounts within seconds. They can also now utilize the NPP to pay employees and their creditors at nearly real-time speeds.
This confers very real economic benefits in terms of access to working capital turns and cash flow efficiencies.
Financial institutions looking to position their business for the digital age can connect to the NPP platform to reduce the waiting time their customers experience to receive their funds.
Similarly, those institutions that opt not to connect to the platform risk being left at a significant competitive disadvantage, as customers demand and expect convenient payment options in real time.
What Is PayID And How Does It Work?
The new PayID is a unique address that enables people to link their financial accounts to a more memorable piece of information. Many users opt to link their email address or telephone number to their PayID.
This identification method makes payments easier for users. Businesses and other organisations are integrating this function into their payment system to allow their customers to use the system without having to remember their account numbers.
To create a PayID, simply register your preferred ID name with a financial institution that is linked to the NPP system. Your financial institution will link your PayID to your actual account.
Using this system, when you need to pay someone, you do not have to share your actual account number. All you need to provide is your PayID. All your other account information remains private. Say goodbye to stolen account numbers. With PayID, your information is always secure.
PayID will also work with the new Osko by BPAY service, a financial product designed specifically for the NPP.
Osko service will enable you to make instant payments in real time. Funds will be available almost instantaneously. It will work no matter which financial institutions you or the other party uses. You can also send a description comprising up to 280 characters together with your payment, so you and your payee have a record of what the payment relates to.
How Is Osko By BPAY Different From BPAY?
BPAY has long provided customers with a secure way of making and receiving bill payments. Once customers sign up for the service, they can direct their bill delivery right to their mobile or Internet banking platform.
Customers can then view their bill and pay it through their online banking platform. This is both a convenient and secure method of bill payment.
Osko by BPAY complements those basic functions with the ability to pay and receive money in real time. With a PayID, Osko customers will enjoy additional security, as with the PayID, they won’t be sharing their actual account number with the payee.
Is Osko by BPAY Secure?
Transactions executed via Osko by BPAY will occur using the Reserve Bank’s Fast Settlement Service. Osko by BPAY’s designers has integrated a raft of safeguards to ensure your transactions remain secure.
Osko by BPAY comes with integrated fraud detection. If a potentially fraudulent transaction is flagged, they can slow down the payment to review the transaction’s legitimacy.
Additionally, when you link your account through your PayID with your email address or phone number, you will never have to share your account number or BSB with a third party. To request a payment or make a payment, all you need to do is to log into your bank account via your Internet connection, increasing the level of security attached to the new NPP and Osko by BPAY system.
The advent of the new NPP will ultimately transform the way Australian consumers and businesses make and receive payments. Australia is strategically positioning the NPP as a catalyst for reinvigorating its economy. For consumers, NPP means greater convenience, security and access to payment information, thanks to the NPP’s faster, more secure, and more reliable and data-rich payment service. NPP is simple and easy to use, saving customers and businesses time and effort by freeing up funds and accelerating the speed at which you can do business.