What is Osko by BPAY and how does it work?

Osko by BPAY is a service designed to offer consumers the ability to transfer money almost instantly from one bank to another.

The standard bank transfer process means it can sometimes take some time for payments between different financial institutions to ‘clear’, but with the launch of Osko in 2018, payments giant BPAY claimed its new product would provide a faster, simpler way for Australian consumers and businesses to transfer money.

At the time of writing, BPAY says Osko is available to the customers of more than 85 Australian banks and other financial institutions. But what exactly is it, how does it work, and who can use it?

What is Osko by BPAY?

Osko is a service from payments platform BPAY, which was launched in February 2018. It’s designed to facilitate the real-time transferring of funds between individuals or businesses and was one of the first services to operate using the New Payments Platform (NPP).

On the Osko website, BPAY claims the product allows customers to make payments from one bank account to another in less than a minute, either by using a BSB and account number or a PayID. PayIDs were another of the banking innovations introduced as part of the NPP, and we explain how they work in more detail below.

Bear in mind that some institutions may place limits or delays on making Osko transfers. For example, if you’re using a PayID, Commonwealth Bank advises that “first time payments to a new payee may be held for up to 24 hours as a security measure”. This means that if you’re currently choosing a savings or transaction account provider and Osko is an important feature for you, it may be best to check with a range of banks to see whether they offer Osko, as well as whether any restrictions or delays apply.

Financial institutions offering Osko generally make it available to their customers through mobile and online banking, but certain banks may only offer it via one of these methods.

How does Osko work?

Osko works by utilising the NPP. This is a payments infrastructure developed by the Reserve Bank of Australia and several other Australian banks. It claims to allow for innovations including near-instant transfers – even at late hours of the night and on weekends – as well as PayID.

Osko allows you to make payments to other individuals or businesses using one of two different identifiers: either their PayID or their traditional account details.

When you make or receive a payment using Osko, you may notice the service’s logo on the payment confirmation screen.

An important point to note is that Osko isn’t a standalone app or website which you use to make payments. Instead, BPAY says Osko is designed to work within your financial institution’s app or website. The specific way providers offer Osko may vary, and in fact, not all financial institutions necessarily offer it to their customers.

Another feature of Osko is the fact that payments can be sent with longer descriptions – up to 280 characters, including emojis, letters, numbers and symbols. This may come in handy for people who regularly receive a large number of payments and need detailed reference or invoice details, such as tradespeople or contractors.

What is a PayID?

PayID is another of the new services developed as part of the NPP. It lets you link a piece of personal information, such as your mobile phone number or email address, to your bank account. This piece of information then acts as an identifier for your account and can be used by other people when they transfer money to you, rather than having to remember and enter your BSB and account number. In the same way, you can use someone else’s PayID to send money to them.

Learn more about PayID

That being said, if you don’t have a PayID or if your bank doesn’t support the PayID service yet, you may still be able to receive near-instant payments with Osko using your BSB and account number, as long as your bank supports Osko. Again, bear in mind that some banks may place limits or delays on Osko or PayID transfers, so it could be a good idea to check in with yours.

Are Osko payments secure?

There were some concerns raised at the time the NPP was launched regarding how instant payments made with PayIDs could potentially leave customers open to fraud, as there could be less time for banks to stop suspicious transactions once they have been made. Osko’s website claims that it is “super safe” because it uses “your bank’s own security standards together with the best industry standards” and that all payments are subject to participating financial institutions’ real-time fraud screening.

However, the NPP’s website on PayID does advise consumers to “always be alert to scams” regardless of what payment method they choose, to avoid being tricked into paying money to the wrong person.

From a security point of view, says one other factor in favour of services like Osko which use PayIDs is that the NPP says there is a “confirmation step” before you make a payment to a PayID, so that you can confirm you are paying the right person or business before finalising the payment.

Can I use Osko?

Whether you can make and receive payments using Osko will depend on which financial institution you’re with. While Osko is offered by over 70 Australian financial institutions at the time of writing, others have not yet made it available to their customers.

You can check whether your financial institution offers the ability to make payments with Osko on the Osko website.

If you are interested in Osko, it may be worth considering a transaction account with a bank or credit union which has rolled it out to its customers. You can compare transaction accounts, but make sure to consider the account’s other features, terms and conditions before committing, to ensure the product suits your overall needs.