NPP Wholesale Pricing
Our objective is to position NPP as the leading low-cost payment method across all relevant end-user segments. This includes enabling the migration of bulk payments and Direct Debits from Direct Entry, but also in the consumer to business retail payments space. The pricing model was developed to best meet the objectives of the AP+ Pricing Principles:
- To be good for Australia and ‘good value’ for ecosystem participants
- To create pricing strategies that support growth
- To deliver a fair return based on the AP+ product portfolio to underpin resilience and future growth
- Creating a level playing field for all users through simple, commercially effective pricing
FY24 pricing model
The NPP wholesale pricing model for FY24 and earlier was a tiered fixed contribution model. This was an interim model put in place while the NPP was in the early stages of volume growth.
NPP Australia signalled a shift to a per transaction pricing model when the network matured, and particularly given the launch of PayTo.
FY25 pricing model
A “per transaction” pricing approach has been determined for FY25. These wholesale transaction fees are charged by AP+ to NPP Participants and, where relevant, NPP Connected Institutions, (who determine how they price services to their customers).
Transaction costs is continuing to decrease as volumes increase
The theoretical price of an NPP transaction has continued to decrease every year as volume has grown (from ~6c in FY23 to ~4c in FY25). Under the new model, we expect this dynamic to continue and the per transaction price to decrease further over time.
PayTo is to be priced competitively with relevant substitutes
A Participation & Reimbursement Fee (PRF), paid from Initiating Participant to Payer Participant, aims to position PayTo competitively, support participation of payer organisations, and reimburse them for wholesale network costs. The Participation and Reimbursement Fee (PRF) is to be independently reviewed, at a minimum of every two years.
A small cost-recovery fee will be used for PayID as usage expands
We are applying a small one-off cost recovery fee for each PayID registration from FY25 to recover the costs of expanding and operating the PayID database in an equitable ways.
An extensive consultation and approval process
AP+ began developing the FY25 NPP pricing principles and pricing model in October 2022, moving into an extensive consultation and feedback period with NPP Participants and the industry. A proposed pricing model was then shared for additional feedback before being submitted to the AP+ Independent Commercial and Compliance Committee (ICCC). The ICCC engaged an independent advisor who was involved throughout this review process.
The ICCC is made up of independent Directors on the AP+ Board who determine pricing for AP+ services (as well as other matters within its terms of reference).
FY25 Pricing
| Product | Fees2 | FY25 |
|---|---|---|
| Osko-SCT | A.i. Per Transaction Scheme Fee (Osko-SCT): Payer | 2c |
| Osko-SCT | A.ii. Per Transaction Scheme Fee (Osko-SCT): Payee | 2c3 |
| PayTo | B. Participation & Reimbursement Fee – Strategic or Standard | 1 or 3c |
| PayTo | C. Initiation Scheme Fee | 0.5c6 |
| CAT-SCT | D. Per Transaction Scheme Fee (CAT-SCT) | Same as Osko-SCT |
| International Payments Service | E.i. Per Transaction Scheme Fee (IPS): Payer | 2.5c |
| International Payments Service | E.ii. Per Transaction Scheme Fee (IPS): Payee | 2c |
| PayID | F. Per New Registration | 2c |
Notes:
- Volume incentives are provided to individual NPP Participants, (including where clearing services are provided to a group, using a single Payments Access Gateway, by a single Participant) so they are encouraged to send more volume, through a series of six progressive volume tiers (from 0% to 20% progressive discount) calculated on Per Transaction Scheme Fee (Osko-SCT, CAT-SCT, IPS).
- On-us Per Transaction Scheme Fee (Osko-SCT, CAT-SCT, IPS) that utilise the PayID or PayTo database will be charged at a discounted (50%) rate.
- Direct Debits migrated to PayTo will be charged a discounted rate for FY25 and FY26. The discount reduces the Per Transaction Scheme Fee (Osko-SCT) applied to the Payee Participant, from 2c to 0c.
- There will be a regular review of the pricing model. Fee levels or other pricing model adjustments will occur annually. The Participation and Reimbursement Fee (PRF) will be independently reviewed, at a minimum of every two years.
- FY25 pricing was updated from ‘guidance’ to ‘confirmed’ on 6-Mar-24.
- The Initiation Scheme Fee is discounted for FY25 and FY26 and reduces the fee from 1.5c to 0.5c.
Contributions by “new joiners” to NPP initial build costs
“New joiner” contributions will continue to apply for Participants, who want to directly connect to the NPP infrastructure. These new joiner costs, reducing each year until 2028, are directly referable to costs incurred by NPP Participants in building the NPP from 2013.
These costs entitle eligible organisations to physical equipment, a set of governance rights and obligations for NPP and access to NPP wholesale pricing for ongoing operational costs.
AP+ acknowledges the Gadigal People of the Eora nation as the Traditional Custodians of the lands on which we are based and pay our respects to Elders past, present and emerging. We recognise all Aboriginal and Torres Strait Islander peoples' ongoing connection to the lands and waters of Australia and thank them for their pivotal role in caring for Country. Always was and always will be Aboriginal Land.
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