Gone are the days of organisations creating products in isolation – now it’s all about teamwork and integration. Here’s why collaboration is the new black.

The banking and payments sector used to be a hotbed of competition: multiple financial organisations vying for the consumer dollar. But that was before online transacting became mainstream and the digital economy leapfrogged everything we knew about traditional banking. Times have changed, and collaboration is now vital for any financial services player that wants to stay relevant in a time of unprecedented change.

“Over the past few years we’ve seen industry move from compete to collaborate in a number of areas,” Reserve Bank of Australia assistant governor Michele Bullock told the Australian Payments Network recently.

“The sharing and publication of fraud data is a good example of this and, more recently, NPP. By collaborating, participants in the payments system can deliver a benefit to industry that is larger than if everyone went alone.” The NPP, or new payments platform, is open-access infrastructure for fast payments in Australia.

Accounting on board

BPAY recently partnered with Xero to integrate a secure payments capability into Xero’s web-based accounting platform. Delivered through software developed in collaboration with DEFT (owned by Macquarie Bank), the initiative enables Xero’s 500,000 subscribers in Australia to accept payments made by customers of BPAY’s 160 financial institution members. Any business owner can sign up through the DEFT app in the Xero app store, and there are expected to be more banks coming on board in the next 18 months.

BPAY’s General Manager of Product, Scheme and Business Development, Keith Brown, says the partnership provides a secure payment gateway for business owners and streamlines the reconciliation process.

“That level of trust and credibility that BPAY gives to a small business is very strong,” he says. “Also, with BPAY, one of the key features for businesses is the ability to reconcile a payment. When you do a direct-entry payment you have to rely on the payer putting in the reference you’ve asked them to; with BPAY they put in a reference number that’s validated at the front end and you can guarantee that the payment you receive you can match directly to the invoice itself.”

Cash loses ground

The BPAY-Xero-Macquarie partnership is an example of how financial services players are collaborating to innovate and keep up with rapidly evolving digital technologies. This is underscored by a 2016 World Payments Report by Capgemini, which found that global non-cash transactions grew by 10 per cent in 2015 to $426.3 billion.

“I think collaboration is the key to the future of payments,” Brown says. “The days when organisations can just sit there and create their own product in isolation are past. We see people like Xero not building [platforms] themselves, but looking to integrate.”

Consumer demand is driving collaboration-led innovation. Brown says people want an accounting platform that provides a “seamless picture” of their finances in one place. “That one place has to bring everything together to bring the best customer experience,” he says. “It’s not about that organisation actually trying to build it all themselves. It’s Xero providing accounting, it’s BPAY providing the payment capability, it’s Macquarie providing the banking on the back of that to bring the ideal customer experience.”
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 is offered by over 150 Financial Institutions. Contact your Financial Institution to see if it offers BPAY and to get the terms and conditions. This is general advice – before using BPAY please review the terms and conditions and consider whether BPAY is appropriate for your personal circumstances.

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