You don’t need to be ‘on’ the New Payments Platform to innovate

27 August 2018

CEO of New Payments Platform says organisations are wrong to assume they must connect directly to the new real-time payments infrastructure in order to use its capabilities.

Since its launch earlier in the year, more than 65 banks, building societies and credit unions have commenced supporting instant payments between Australian consumers and businesses via the New Payments Platform.

Most are offering these payments via Osko® – the first ‘overlay’ service to launch from the Platform. Developed by BPAY Group, Osko taps into the Platform’s real-time clearing and data capabilities to deliver Australia’s first instant account-to-account payments service. According to BPAY Group, Osko has already processed more than 23.4 million payments totalling nearly $17b since the service started to roll-out in February.

NPP Australia CEO Adrian Lovney believes Osko is just the first of many ‘payments experiences’ that will be brought to life by the Platform.

“Since we launched earlier this year we’ve been speaking with a wide range of organisations keen to understand how they can use the Platform’s capabilities. But while most are clear on the innovation they want to bring to life, they’re not always clear on how they need to interact with the Platform to do this. Many organisations incorrectly assume they need to connect directly to the Platform, but that’s definitely not the case,” Adrian said.

The Platform has a regulatory framework that requires directly connected organisations to be one of Australia’s 150 Authorised Deposit-taking Institutions (ADIs) in order to initiate, process and receive real-time payments between customer accounts. This helps keep payments safe because as ADIs they meet prudential requirements set by the Australian Prudential Regulation Authority (APRA), the authority responsible for financial system stability in Australia. Organisations with a Restricted ADI licence can also apply to connect directly.

However, organisations are also able to connect to the Platform via an agency arrangement with one of the directly connected organisations. There are currently more than 50 organisations that connect this way, and with a range of directly connected institutions to choose from, the market for indirect connection is a competitive one.

But Adrian says the act of processing real-time payments is not the sole generator of NPP-enabled innovation. On the contrary, he says that the Platform’s true potential lies outside its infrastructure.

“A great deal of innovation brought to life by the New Payments Platform is likely to happen outside the Platform itself by organisations developing unique propositions that could occur ‘before’, ‘after’ or ‘around’ the real-time payment leg of their product or service.

“This could include things like the real-time funding or defunding of digital payments wallets, short-term lending, the first or last domestic leg of an international remittance, or QR Code driven products. Innovators can use APIs to access the NPP and its capabilities, like Osko, to support multiple use-cases such as the purchase of airline tickets or to enable payroll payments.

“All of these examples could incorporate PayID – the Platform’s addressing service that enables payments to be made into accounts using information that is more memorable than a BSB and account number, such as a phone number, email address or Australian Business Number.”

According to Adrian, the only requirement to bring these types of innovation to life is a collaborative relationship with any one of the many NPP-connected financial institutions that have the ability to clear the real-time payments leg of these experiences. None of them require an organisation to be directly connected to the Platform. Over time, the number of NPP-enabled financial institutions is set to grow even further, offering a truly competitive real-time payments landscape.

But these examples are just thought-starters for what Adrian describes as the ‘endless possibilities’ of the New Payments Platform.

“In the near future we expect to see first iterations of the Platform’s data capabilities come to life with payments experiences such as the sending of invoices with a request to pay.

“But these are just the first steps towards a longer-term view of the future; the Platform has been designed and built in a way to ensure it is flexible and extendable, enabling it to evolve to meet whatever the consumer and business of the future needs,” he said.

By NPP Communications


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