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SMEs and the New Payments Platform (NPP)

SMEs and the New Payments Platform (NPP)

The first phase of the New Payments Platform (NPP), Australia’s advanced payment system, has been in action for a few months and many SMEs are still getting the hang of how it might impact them.

Here’s a handy overview of what the NPP entails, and what is planned.

The NPP is a billion-dollar collaborative project between the Federal Government and 13 banks, offering customers real-time payments and other benefits and aiming to provide a world class payments infrastructure for the national economy.

Many other financial institutions connect to the platform via the original 13 financial institutions collaborating within the NPP – you can find out here if your financial institution is already involved.

The platform went live in the first quarter of 2018 with a focus on consumers and retail transactions (Phase Two in 2019 may include B2B transactions).

NPP boasts the capability to send, clear and settle national payments in under 10 seconds, as opposed to the traditional three day wait.

Many business owners may have already heard, via their bank, reference to ‘faster payments’, OSKO or Pay ID – these are the key features in the first phase of the NPP:

  1. Osko by BPAY – bank customers can register to make and receive real-time payments 24 hours a day, 365 days a year (for example, to instantly pay friends when covering your share of a restaurant bill). Consumers can access Osko through their existing banking applications such as online banking and mobile apps.
  2. PayID – a simplified addressing service, where payments can be made to the Pay ID you choose, such as your mobile number or ABN instead of hard to remember BSB/account numbers. Individual financial institutions may offer different options – the key is to choose something you can easily remember.

What does NPP Phase One mean for businesses?

The platform does not currently cater for the higher volumes and values of transactions typical in a B2B relationship, however, many SMEs could see benefits within personal and B2C banking.

As well as improving the speed of banking transactions, the NPP offers flexibility and additional capabilities beyond traditional payments methods.

The voluntary platform is designed to provide additional infrastructure and payment solutions to assist the ever-changing needs of modern society – it is not designed to replace payments made through existing methods.

For example, BPAY’s Osko product seamlessly works alongside BPAY and BPAY View, but each service is different: BPAY is great for paying bills, BPAY View is great for sending bills straight to your online banking and Osko is aimed at sending money from person to person.

What does the NPP mean for Scottish Pacific clients?

Whilst it may be possible for payments to be made to and from Scottish Pacific bank accounts via NPP, there are some restrictions as to how we may leverage the platform:

  • A daily limit is applied for transactions processed by users of NPP. This limit is set with the consumer in mind and, as such, it is not possible at this stage for Scottish Pacific to process payment runs to our clients through the platform.
  • Whilst deposited funds may credit a bank account immediately via NPP, our banks’ reconciliation processes continue to occur overnight and mean therefore payments continuing to be recognised on the following business day.

This means that at the moment, there are no changes to the way we do business with our clients.

We understand that the capability to support business to business transactions may be a feature of the next phase of the NPP roll out (planned for 2019), and as soon as we have that confirmed we will work on a solution to enable us to offer NPP payments.

See the NPP’s snapshot of what the platform offers the SME community.

* This blog is meant to provide generic information about the NPP relevant to SMEs. For specific advice for your business, please contact your financial institution or adviser.

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