Australia’s New Payments Platform (NPP) was launched in February 2018 to support real-time payments through the country’s financial institutions. There may be some interesting lessons to be learned and comparisons made to what is happening, or what might happen, with faster payments here in the U.S.
No, the markets aren’t the same:
- The U.S. represents a particularly large and complex payment market,
- There will be in 4 or 5 years, two competing real-time platforms which is not the case in Australia,
- The overlay services that have been built on top of NPP are focused on consumer solutions first, namely BPAY, a bill pay product and Osko (also offered by BPAY) a person-to-person funds transfer service.
Despite the differences, two recently published articles regarding NPP adoption and security are worth a read.
One article gives some insights into the slower than expected adoption of Osko by consumers:
The NPP was launched in February 2018 by NPP Australia and 13 financial institutions. The new payments infrastructure allows for payment innovations including near-real-time payments between different banks. In July 2019 the RBA criticised the slow and staggered rollout, calling it “disappointing”.
“The slow roll-out of NPP services by some larger banks has been disappointing and overall NPP volumes have grown more slowly than was initially hoped. While it was always expected that financial institutions connected to the NPP would roll out customer services according to their own schedules and priorities, this roll-out has occurred more slowly than anticipated,” the RBA said at the time.
A number of large banks are yet to extend NPP capabilities to their customers. This “rollout” includes giving them the ability to make near-instant payments through Osko and set up a PayID, which is a unique identifier such as a mobile phone number or email address. PayIDs are not required to make or receive real-time payments but are an additional feature of the NPP. The financial institutions who are yet to offer these services to their customers include some of the 13 which own the NPP.
Another article provides some warnings around securing directories that link consumers’ email and mobile numbers to payment details:
More than 90,000 Australian bank customers have had their bank details and other personal data exposed after PayID was breached via Credit Union Australia, in the second major attack on the payment management system in recent months.
A spokeswoman for payments provider Cuscal, which is partnered with more than 120 banks and financial services institutions in Australia and overseas, said the breach originated with one of their clients and impacted “most organisations” that use PayID.
Some information attached to individuals’ PayIDs was accessed. No financial transactions took place and nor can the information accessed be used, on its own, to enable financial transactions.
“Information security is obviously of paramount importance. We are deeply disappointed this occurred and apologise to those affected,” the statement said.
PayID, a function of the New Payments Platform (NPP), allows banking customers to use their phone number or email address to identify their account for real-time payments, instead of having to remember their BSB and account number.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group