The availability of Australia’s New Payments Platform (NPP) is fast approaching, and it’s going to revolutionise the way Australians pay each other.

Here at BPAY Group, we’re excited because our very own product – Osko by BPAY – will be introduced as the first overlay service.

To give us more insight into how our product will utilise the NPP infrastructure, we invited Adrian Lovney the CEO of New Payments Platform Australia (NPPA) to participate in a staff forum, and to give us insights into potential future capabilities the NPP will offer.

Lovney and the NPPA have been working closely with BPAY Group to ensure Australian consumers and businesses will soon benefit from the introduction of near real-time transfers.

The NPP infrastructure

The NPP is at the forefront of the international experience. While the New Payments Platform is being built to respond to Australia’s domestic needs, it is also incorporating the best of features seen in comparable international systems.

Some of the NPP's world-class functionality includes an open access infrastructure that will empower innovation, are an enhanced data capability based on ISO20022, a centralised Addressing Service which provides the ability to confirm a payee prior to payment, and real-time settlement to deliver certainty to payees.

The NPP’s architecture is described as a standard set of rails owned by participants from the banking and payments industry, but where other players (i.e. businesses and emerging fintechs) can create products or services that sit on top of those rails (described as overlay services) making use of the underlying infrastructure – the first of these overlay services is Osko.

According to Lovney, while the speed of transfer is one compelling aspect, the platform’s other capabilities are also ground-breaking. The infrastructure has the ability to transfer information-rich data, of benefit to both large organisations and individuals. Attaching invoices to payments, in the form of a document or URL, promotes automation for business transactions, ultimately improving cash flow for businesses and convenience for consumers.
 

Osko by BPAY

Osko will be the first overlay service Australians will use (see Figure 1), and will offer the transfer of funds within seconds, with confirmation of delivery. The service will be provided by banks and financial institutions via their digital banking channels. Over time, the Osko service will deliver documents attached to payments (like remittance advice) and the ability to request payments. The latter, according to Lovney, will be a real game changer, as it gives control to both the payer and payee.

Figure 1: Osko, the first NPP overlay service

What’s next for the NPP?

However the NPP doesn’t stop with Osko.
 
Real-time payments are often associated with P2P payments, however there are other ways to utilise the infrastructure. While there are obvious benefits for consumers, the capabilities of the NPP have potentially enormous benefits for businesses, both small and large, often caught up in cash-flow issues and other financial obstacles, or for whom the transfer of rich data connected to value in real time offers tangible benefits.
 
Other potential use cases for the NPP include:

The role of the NPPA

As CEO, Lovney describes the role as building, growing, and governing the NPP infrastructure and technology in order to provide a ‘set of rails’ for overlays to build upon. He says, “It’s not our job to pick winners. Our job is to protect the basic infrastructure in terms of its security and enhance its functionality to increase ongoing use. The market will decide if an overlay service is a good idea or not, in terms of which participants sign up to it and how many customers use it. That’s a market-driven decision,” he said.

The NPP will become available towards the end of 2017, subject to industry testing, with Osko by BPAY launching soon after. The service will be offered by over 70 financial institutions initially, including the four major banks.

To find out more about Osko by BPAY visit our website.  

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