What is the New Payments Platform?
The New Payments Platform (NPP) is a new system being created by the Australian Payments Clearing Association that will allow low-value transactions to be made in real time.
What that means is a fast, versatile system for making everyday payments.
No more will we say, “I made the online transfer to your account yesterday, so the funds should show up in your bank account in the next few days.”
No more will we accidentally overspend our budget because not all of the transactions we’ve made are showing up when we look at our bank balance online or in an app.
Much like the centralised banking database that allowed the creation of EFTPOS in Australia and New Zealand, the New Payments Platform promises a revolution in how much it costs banks in time and money to transfer money between institutions.
This new system will cost $1 billion to implement, but it won’t cost taxpayers a penny. It is being funded by 12 banks and payment providers, including “the big four”.
When you can expect to use it
Design plans for the system were first released back in 2012 by the APCA and it is expected that the system will be operational in 2017.
NPP Australia signed a 12-year contract in December 2014 with SWIFT, the international payments cooperative who agreed to build and operate the new platform, and Fiserv, who agreed to perform the IT operations.
On 10 August 2015, APCA announced that the “design and elaborate” phase had been completed and the project had moved into the “build and internal test” phase.
In October, Paul Lahiff, independent chair of the NPP Steering Committee reported that the project was 3 months into its build phase with SWIFT. Everything is on track for its scheduled completion date in the second half of 2017.
Lahiff said no banks were dragging the chain. “We are all moving in concert.”
This is a very good sign. In 2011, the pull-out of key banks derailed BPAY’s Mambo project, which would have been a potential major challenger to PayPal.
Banks can sign up for the program at any time, and more than a dozen already have. Ask your bank if they are on board for you to use the NPP through your Everyday Transactions Account in 2017.
Just because a new system is coming, doesn’t mean you should be complacent about getting value for money in the meantime.
Compare transaction accounts on our website and check that your transaction account stands up against what’s on offer in the rest of the market.