What is the NPP?

A new era for payments in Australia

The New Payments Platform (NPP) is new national, open access payment infrastructure for the Australian economy. It gives consumers, businesses and government departments a secure and efficient platform which they can use to make fast, versatile and data-rich payments to meet the evolving needs of a 24/7 digital economy.

How does NPP work?

There are three important parts to the NPP:

1. The ‘Basic Infrastructure’

The Basic Infrastructure includes a network (which connects participants), a switch (which moves messages between participants via the network) and an Addressing Service which enables transaction accounts to be identified by a ‘smart’ payment address such as an email address, phone number or ABN number. Other address types may be available in the future. The Basic Infrastructure will always be open for business, 24 hours a day, 365 days of the year.

2. The Fast Settlement Service

The Fast Settlement Service (FSS) is provided by the Reserve Bank of Australia. This world-leading capability enables every single payment made on the NPP, regardless of its size, to be settled in real-time in central bank funds, across each financial institution’s Exchange Settlement Account (ESA).  This allows for completion of settlement between financial institutions prior to crediting of the payee’s bank account.

3. Overlay Services

‘Overlay Service’ is the name the industry has given to the payments related products or services, and that use the Basic Infrastructure. These products or services could offer vastly different experiences, or similar experiences, and in many cases could compete with each other. This is where the NPP breathes life into innovation and competition. The first Overlay Service to go live on the NPP will be offered by BPAY.

 

What can the NPP do?

For customers of financial institutions connected to the NPP, it will empower them to make and receive payments in a matter of seconds, 24 hours a day, 365 days of the year.

The first product that will use the NPP infrastructure will be delivered by BPAY and will provide a convenient and accessible service for consumers to send payments from an account at their financial institution to another person or business using simpler payment addresses such as a phone numbers or email addresses. It will deliver fast availability of cleared funds, rich data and delivery confidence.

The NPP’s ‘Addressing Service’ will make it possible for consumers to link an easy-to-remember identifier to their account, such as an email address, phone number or an Australian Business Number (ABN) so other people can make payments to them without having to use a BSB and account number. Overtime, other identifiers may be added.

from NPPA

Tags: NPP, NPP Australia, New Payments Platform