Dolphins and porpoises. Rabbits and hares. Moths and butterflies. In the animal world, they’re all different yet commonly confused.
In the payments world, Osko®
are also different, but often confused. Each performs a distinct role within Australia’s new fast payments network, utilising the New Payments Platform (NPP). We spoke with Osko Product Manager Cathie Morrison at BPAY Group, to work out the difference.
Put simply, Osko is a way of sending money using the NPP. PayID, on the other hand, is a new way to address a payment instead of using a BSB & Account number.
“Osko is a simple, fast, flexible way of making payments to anyone – friends, small business, organisations – under a minute. It’s a service that you use from within your bank mobile app or internet banking,” says Morrison.
It also allows the sender to include up to 280 characters of text to their message – compared with 18 on standard bank transfers – which provides a lot of scope for describing the purpose of the payment.
Developed by BPAY Group, Osko is the first NPP overlay service launched to the public. In the coming months and years, banks, fintechs and other businesses are likely to release a range of overlay services allowing individuals and businesses to use the NPP in many different ways.
In its current iteration, Osko is ideal for payments between friends and families for shared bills or expenses such as restaurant meals or holidays and for payments to some small businesses, such as tradesmen.
“It’s about providing services that are market-leading such as real-time payments, providing them from the centre of your financial world which is your banking environment"
A PayID is an identifier for a person or business’ bank account. It performs the same function as a BSB and account number but is in an easier to use and memorable format, such as a person’s email address or their phone number.
Businesses can opt to use their ABN, while very large organisations will also have the option of an organisational identifier, which might just be their business name.
Thus instead of needing to remember and type in someone’s bank account details, payers can simply put in the PayID of the party they are paying.
This also reduces errors. It is easy to get a single digit wrong when putting in bank account details and usually there is nothing to tell the payer they’ve made a mistake.
PayIDs are easier to get right but also have the added feature that when you use a PayID with an Osko payment, the payer is shown the name for the PayID, so they can check that the money will go to the person they expect and they are asked to confirm that it is correct before making the payment.
PayID is part of the NPP’s addressing service, which routes payments to the correct bank and accounts. It can work with any other NPP services when they are launched.
Importantly, PayID and Osko are separate. It is possible to pay people via Osko using their BSB and account number, but not as simple and convenient as with a PayID.
A single bank account can have several PayIDs linked to it, but a single PayID can only link to one bank account.
The opportunity for banks
Cathie Morrison says Osko provides an opportunity for banks to “keep their customers close”.
In an environment where there are disruptors offering to facilitate payments outside of financial institutions, banks can leverage their trusted relationship with customers to ensure they continue to remain central to their customers’ payments.
“It’s about providing services that are market-leading such as real-time payments, providing them from the centre of your financial world which is your banking environment, and providing them in such a way that your customer doesn’t need to go anywhere else,” she says.
“In terms of what the product is for the customers, there’s a superiority in the offering that can’t be established anywhere else but in your banking environment.”
Ultimately Osko and PayID are innovations within payments that make the experience of paying faster and simpler for customers.
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.