The 'plumbing' that underpins an important part of Australia's payments system is being renewed. Here's what it is likely to mean for your business.
The Australian Payments Clearing Association (ACPA, the self-regulatory body for Australia's payments industry) describes the New Payments Platform (NPP) as "new infrastructure for Australia's low-value payments. It will provide Australian businesses and consumers with a fast, versatile, data-rich payments system for making their everyday payments."
The idea is that all Australian deposit-taking institutions will use the NPP to process any kind of non-cash payment from one account to another.
Perhaps one of the most important changes is that value will move at the same time as the payment message. So where your customers might currently pay you via a bank transfer that doesn't show up in your account for a day or two or three, under the NPP the funds would reach you in a matter of seconds - even if the transaction takes place outside of banking hours.
Another is that it allows a move away from routing payments to BSB and account numbers, instead allowing the use of personal identifiers such as mobile phone numbers (as we have already seen in ANZ's goMoney app) or email addresses (as used by PayPal). The difference is that these identifiers would be available regardless of the institution handling either end of the transaction.
Furthermore, the NPP makes provision for more complete remittance information to be sent along with the payment, so with the cooperation of all parties there should be less need for you or your accounting system to make educated guesses about who has paid you, and exactly what they are paying for.
The NPP has been designed to foster competition and make it easier for established or new payments providers to introduce new services. But whether this will result in lower fees to small businesses or any other classes of customers remains to be seen.
The last official word from APCA concerning the NPP's progress came last December, with the announcement that the NPP's infrastructure will be built and operated by SWIFT, the organisation that handles international payments between banks as well as certain domestic transactions.
The NPP is expected to become operational in the second half of 2017.