In 1997 John Howard was Prime Minister and Bill Clinton was in the White House, the Spice Girls were the world’s most popular band and DVD players were starting to replace video machines.
It was also the year that BPAY was launched as Australia's latest innovation, at the advent of automated banking.
The service was released to the public in November 1997, with participation from seven different financial institutions and 35 different billers, mainly utilities which had large customer numbers and payment volumes.
BPAY was initially offered via the phone, allowing users to ring their bank and use their phone’s touchtone keypad to navigate their way through a bill payment, keying-in the biller code and the customer reference number to make a payment.
Technology has come a long way in the last 20 years, but when BPAY launched, it was the latest technology and a much more convenient way of paying bills.
“In the past, people were paying bills with cash in a bank branch or putting a cheque in the mail. Compared to that, BPAY was fast, convenient and simple,” says Keith Brown, General Manager Product, Scheme and Business Development at the BPAY Group, who joined the organisation soon after the launch.
Not only was BPAY a faster way of paying bills, it also provided certainty for both the consumer and the biller that the account had been paid, as it does today.
The B of BPAY
Brown says the reaction was slow for the first couple of months. One of the challenges was that, unlike other payment methods such as cash, cheque or direct debit, BPAY was a brand that needed to be promoted to the public, and so began the focus on the stylised B of BPAY.
“There were TV campaigns at the time focused around the ease of use and the B which people looked for on their bills. Once that started to appear on bills, then the take-up was rapid,” he says.
As it remains today, BPAY was a service provided via banks and as such banks were also keen to promote it.
As the service became better known, more billers wanted to join. Brown remembers the BPAY fax machine printing out requests to join from businesses wanting to offer BPAY, all day long. “It wasn’t just the customer paying their bill seeing the benefit, it was also the billers,” he says.
Brown sees some parallels with the launch of the BPAY Group’s Osko
payment service in 2018, which allows people to make instant payments to friends and businesses, using a phone number or an email address instead of a bank account number.
“Even right from the start, there was transaction volume coming through. As more people see the benefits of real-time payments and paying friends or tradies using a mobile number or email address, we’ll see that volume significantly ramp up,” he says.
BPAY was introduced before internet banking got underway in Australia in 2001, but was quickly adapted for the internet, because the underlying technology stayed the same. Only the interface had to change.
Rapid growth proves success
In 2003, usage of BPAY internet payments surpassed phone payments; by 2004 annual transaction volume exceeded 120 million payments; and by May 2013 the service was processing an average of 1 million transactions a day.
Today it appears on bills of over 45,000 companies, through over 157 banks digital banking channels and is usually processing over 1.6M transactions a day.
Evolution is just ahead of the times
The BPAY Group business has evolved over the years. It originated as Bankcard then evolved to Cardlink Services – which processed paper credit card slips and took phone calls from shops wanting to verify credit cards. Today the organisation is BPAY Group
which not only operates BPAY and Osko, but has launched propertytech and data start-ups Sypht
But one thing remains constant – the popularity of BPAY as a way for Australians to pay.
“The simplicity of it is one of its core benefits. One of the key things with BPAY when you look at it, going from that phone banking to mobile to wearables, and whatever the future may be, we’ve had to change the service very little to accommodate those technologies,” says Brown.
“The brand is strong. It’s simple to see what to pay. A person's details remain confidential through the payment process. It’s consistent for the biller. It’s simple for the banks to implement. Therefore, it’s easy to adapt to this new technology. I think that’s why it’s still loved and the preferred way to pay and is still growing today.”*
Brown says the BPAY Group is applying the lesson to Osko, by ensuring it is a simple, easy-to-understand and easy-to-use service for consumers and easy to implement for anyone wanting to receive payment, be they an individual or a tradie.
*Based on RFi Payments Diary 2017
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
Published by BPAY Pty Ltd. BPAY payment products are offered by over 150 Financial Institutions. Contact your Financial Institution to see if it offers BPAY payment products and to get the terms and conditions. This is general advice – before using BPAY payment products please review the terms and conditions and consider whether BPAY payment products are appropriate for your personal circumstance.