After many years of complaints by both businesses and customers about the time taken to receive payments and the risks of the BSB/account number system, the New Payments Platform (NPP) promises simply addressed payments, with near real-time funds availability to the recipient, on a 24/7 basis.
The New Payments Platform is expected to commence in January 2018.
The Bulk Electronic Clearing System (BECS) for recurring electronic debit and credit payment instructions which commenced in 1994 will be superseded over time.
The components of the NPP will include:
- an Addressing Service which enables transaction accounts to be identified by a simpler payment address such as an email address, phone number or ABN number; and
- The Fast Settlement Service provided by the Reserve Bank of Australia which will enable every single payment made on the platform, regardless of its size, to be settled in real-time.
If a financial institution offers PayID and a customer elects to use it, a recipient will no longer need to provide financial account details, such as BSB and account number, when receiving payments.
PayID will only be available for Australian domestic NPP Payments and not international transfers.
Although payment addresses will be simpler and transfers instant, the NPP Regulations contain provisions for Mistaken Payments, Error Payments, Misdirected Payments and Duplicate Payments which are similar to the ePayments Code currently covering internet payments.
Terms and conditions for financial institution customers will need to be updated to reflect the new system.
The system allows third parties to provide additional services (such as attaching documents to the payment) using the NPP platform.
