A new payments system has officially launched in Australia, giving consumers and businesses access to a new and modern payments system. Soon, services that use the New Payments Platform’s (NPP) capabilities will commence rolling out from about 60 banks, building societies and credit unions across the country.
This will give consumers and businesses the ability to
- Transfer money instantly between accounts at different financial institutions
- Make payments 24 x 7 x 365
- Include more accompanying information with payments than ever before
- Use a PayID, which lets you see the name of the person or business you are paying before sending the payment.
RateCity money editor Sally Tindall said the ability to transfer funds instantly was long overdue and in many respects a game of catch up.
“Being able to pay a tradie in real time or instantly send money to your kids in a time of crisis is a major step forward.
“For many Australians, it also means receiving your wages sooner. Gone are the days of waiting one, two, sometimes even three days for your paycheck to clear. It will now go straight from your employer’s account to yours, in less than 60 seconds.
“The platform also allows people to include transaction descriptions of up to 280 characters, with the added artillery of emojis, for anyone who felt cramped by their bank’s merciless word limits,” she said.
However, RateCity warns the success of the NPP will be built on all banks around the country coming on board quickly.
The Commonwealth Bank, Westpac and National Australia Bank will begin instant transfers from today, however, ANZ who are also signed up to the platform, will take more time before their systems are ready.
“There’s no point signing up to PayID if the person you want to transfer money to can’t receive the money because their bank isn’t playing ball.
“The entire banking community needs to take part in this new system for it to be a success.
“At present, there are over 60 banks signed up, however, a number of them are not ready to roll out the service and there are still some notable organisations missing.
“Consumers should also check with their financial institution to see if there are any costs associated with using the platform.
“It’s up to individual banks to decide how much they will charge for using the service. Let’s hope this is one area of banking where they put customers ahead of profits.
“While the banking sector should be congratulated for pulling this off, it really is the start in a game of catch ups. The UK have been transferring money in real time for 10 years now, and here we are, just starting to sit at the grown up’s table,’” said Ms Tindall.
Osko is the first product to be developed using the Platform’s capabilities. According to John Banfield, CEO of BPAY Group, the new person to person service will mean family, friends and freelancers ca get paid in under a minute.
NPP CEO Adrian Lovney says that over time more payments and products and services are likely to make use of the NPP’s PayID functionality.
“PayID will make payments simpler because it means you don’t have to remember, or share, your BSB and the 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.