Australia’s New Payments Platform marks rise in transactions but pace of rollout by major banks is slow

Maria Nikolova

RBA Governor Philip Lowe says there are now around 400,000 NPP transactions per day, and more than 2 million PayIDs have also been registered.

Australia’s New Payments Platform (NPP) marks rise in transactions but rollout by major banks is slow, Philip Lowe, Governor of the Reserve Bank of Australia said in a speech today.

The New Payments Platform, which was launched earlier this year, allows people to make payments 24 hours a day, 7 days a week, using just a simple identifier such as a mobile phone number or an email address. It also allows a lot of information to accompany the payment.

The number of transactions through the NPP is steadily increasing, Mr Lowe said. After a relatively low-key start, there are now around 400,000 NPP transactions per day. More than 2 million PayIDs have also been registered, and the Reserve Bank expects further growth as the banks continue to roll out services to their customers.

The concept behind the NPP is that so-called ‘overlay’ services are developed, and that these overlay services offer new functionality that utilise the real time capability of the NPP. The first overlay service provides for a basic account-to-account payment. Among the subsequently planned overlay services are ones that will allow someone to send a request to pay. Another overlay service would allow a link to a document to be sent with a payment; this could be a payslip or a detailed record of the transaction.

In terms of rollout speed, Mr Lowe said that it was originally anticipated that these two overlay services would be up and running not long after the NPP launch. Unfortunately, this timeline has slipped. A number of the major banks have also been slower than was originally expected to roll out NPP functionality to their entire customer bases.

This, however, is in contrast to the capability offered by smaller financial institutions, which from Day 1 were able to provide their customers with NPP services.

In the light of the slow pace of roll-out by the banks, and the prospect of delays for additional overlay services, Mr Lowe recently wrote to the major banks on behalf of the Payments System Board seeking updated timelines and a commitment that these timelines will be satisfied.

Mr Lowe noted that in countries where banks have been slow to develop payment applications that meet the needs of the public, other possibilities emerge. China is one example, with the emergence of QR-code-based payments.

Let’s recall that, in September this year, to promote the adoption of QR code (Quick Response code) payments in Hong Kong, the Hong Kong Monetary Authority (HKMA) announced the Common QR Code Standard for Retail Payments in Hong Kong together with the launch of an associated mobile application tool. A free mobile application tool, namely “Hong Kong Common QR Code” (HKQR), was released back then. It can be used for converting multiple QR codes from different payment service providers into a single, combined QR code. This is set to facilitate merchants, especially small and medium enterprises, in using a single QR code to accept different payment schemes, instead of displaying multiple QR codes to their customers.

Mr Lowe noted the question about RBA’s possible intentions to issue an electronic version of the Australian dollar, an eAUD. He said that he had already spoken about this issue last year, concluding that RBA did not see a public policy case for moving in this direction at the time. These views have not changed after one year, he added.

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