Digital is the all-purpose catch phrase for the customer world we live in today. The use of technology, access to services and social media sees customers demand real time immediate services and straight through processing.

In June 2012, the Reserve Bank’s Payments System Board (PSB) noted that some customer-facing innovations had benefited financial institutions and their customers. However, it also noted that market forces might not be sufficient to produce some innovations that are in the public interest, particularly those requiring collective effort to succeed (RBA 2012). To address these concerns, and recognising trends internationally, the PSB set out a number of ‘strategic objectives’ that included the ability for business and consumers to make and receive real-time retail payments.

The batch driven overnight ( or multi day) processing nature of payments and settlements is currently going through a revolution thanks to Immediate real-time payments that are coming to Australia under the banner of the New Payments Platform (NPP).

The Reserve Bank issues a strategic objective that payments, this The New Payments Platform (NPP), a real time payment infrastructure in Australia is expected to be operational in 2017. NPP is an industry response to Reserve Bank’s strategic objectives on payments and implanting the former “Real time Payments Committee’s proposal on innovation in the payments system.

The NPP platform will:

  • Connect all ADI’s together in a standardised way. This will allow them to process any kind of non-cash payment from one account to another.
  • Enable funds to be accessible almost as soon as payment is received even when the payer and payee have accounts at different financial institutions.
  • The platform is the necessary financial plumbing for the economy of the future.
  • The platform will be able to support very fast end-to-end turnaround times to meet the needs of the digital age.
  • By the end of 2017 offer:
  1. Faster Payments – clearing and settlement of payments in seconds which will be available outside normal business hours (even 24 hours 7 days a week).
  2. More information – messaging standards that will enable richer remittance information with transactions.
  3. Addressing services – payments can be initiated using alternate customer address identifiers such as mobile phone numbers, email addresses or Australian Business Number (ABN) as opposed to BSB and Account Number
  4. Overlay Services – tailored payment solutions (based on market needs)

The impact on the entire financial services industry will take some time to realise, but the NPP will drive the market forces to produce innovation that is in the public interest – across Banking, Superannuation, Wealth Management and beyond.

IQ Group has been part of the journey and continues in Australia….

The South African Banking system is considered to be early adopters of the real time payments platforms, and the IQ Group in South Africa has been part of this exciting journey since 2006.

The Reserve Bank Referenced the South Africa RTC platform in the early days as a reference implementation:

We will be looking to share the learning’s of the RTC system and how it can apply to the NPP rollout in Australia.

The innovative possibilities from the NPP are exciting, as Customers demand real time transactions we will see innovation flourish.

We will spend more time on the NPP, its roll out time table and implications in upcoming blogs and whitepapers.


Ron Mullins

Director – Business Development Network