Banks roll out new, rapid payments platform

Banks will today begin to roll out a new payments platform that allows customers to transfer money almost instantaneously.

Adrian Lovney, chief executive of the New Payments Platform. Pic: Britta Campion

Australian banks will today begin to roll out a $1 billion new payments platform, allowing customers to make money transfers almost instantaneously.

The new platform, launched by the Reserve Bank, will also include a new “Pay ID” system where people can choose their own easy-to-remember identification method, such as a mobile phone number or email, to direct money to their bank account rather than having to remember the account number itself.

The new platform is the result of four years’ work by the Sydney-based New Payments Platform, whose shareholders include the major banks and the Reserve Bank.

“The new platform will allow payments to be made in real time, 24 hours a day, seven days a week, 365 days a year,” NPP chief executive Adrian Lovney told The Australian.

Around 60 banks, credit unions and building societies will begin to roll out the service to their customers from today, and over the coming months, according to the RBA.

“The public launch of the NPP represents the delivery of a major piece of national infrastructure,” RBA Governor Philip Lowe said. “I would like to thank everyone who has been involved in the NPP project and I look forward to the payment innovations it will make possible and the benefits this will generate for all Australians.”

But it would be up to the individual banks to determine their approach to rolling it out, Mr Lovney said.

“We expect they will gradually roll it out to their customers, starting with mobile banking and then online.”

Mr Lovney said the system was not designed for ordinary bill payments, which were not time sensitive.

But he said it would benefit people who wanted to pay people or businesses instantly such as babysitters, tradespeople, friends and sellers of goods such as people on Gumtree or eBay.

The system could also be a boon to small businesses which can suffer cash flow issues as a result of delayed payments.

At the moment, money transfers can take several days, particularly if the transaction occurs just before a weekend or holiday period.

Mr Lovney said the money transfer could take as little as 60 seconds, which will be particularly helpful for people doing business outside ordinary business hours.

The New Payments Platform organisation was set up in 2013 as a result of a 2012 review of the payment system by the Reserve Bank.

The company was established with an initial group of 13 shareholders including Westpac, the Commonwealth Bank, ANZ, the National Australia Bank, Macquarie Bank, ING Direct, HSBC Australia, Citigroup, and Bendigo and Adelaide Bank.