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Transaction Banking

Australia’s New Payments Platform: Changing the Way Banks and Insurers Do Business

2016-12-08 10:37

FOREWORD

IMAGINE being able to make real-time, data rich payments easily and quickly, any time, anywhere. This is the future thanks to Australia's New Payments Platform (NPP). 

The introduction of NPP will deliver many benefits and future innovations to all businesses, companies and financial institutions doing business in Australia for decades to come.

The level of capability and flexibility is comparable to, or in advance of, real-time systems available elsewhere in the world.

KEY TAKEAWAYS

  • Developed collaboratively by 13 banks or authorised deposit taking institutions (ADIs), including ANZ. NPP will provide the basic infrastructure to connect these financial institutions, and through them businesses and consumers.
  • NPP provides an opportunity for consolidation of the payments landscape, removing inefficiencies and simplifying the retail and corporate customer experience. There is the opportunity to provide:
    • a range of retail and wholesale payments (e.g. insurance claims, dividends, rebates and government welfare payments), and
    • alternative payment options for businesses’ customers (e.g. to email addresses, mobile phones and Australian Business Numbers).
  • Payments will be faster, 24x7.
  • Funds will be accessible almost as soon as payment is made – even when the payer and payee have accounts at different member financial institutions.
  • Support for the future development of tailored ‘overlay’ services in the new infrastructure creates a payments foundation that delivers greater value for end users.
  • NPP is expected to leapfrog many existing real-time systems around the world over time.

Opportunities

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  • For businesses with large working-capital cycles and funding exposures, NPP will allow for more effective use of funds by slowing down payments to the end of the invoice cycle.
  • NPP will also improve reconciliation and payment visibility by increasing data sending capabilities.
  • Businesses will get a much better understanding of the behaviours of their payers because of the ability to send more information with each payment.
  • Insurance companies will be in a much better position to help customers access funds for immediate needs in the event of a natural disaster, as they can pay a portion of their claims in real-time.
  • Banks and other ADIs will be able to leverage NPP to provide an improved customer communication experience, and greater customer flexibility with payment options.
  • Consideration should be given to the way NPP will interact with the existing payment systems in Australia, as well as the investment and resourcing requirements to connect to it.
    • Systems must be able to manage the flow of information 24/7.
    • These include standardisation of file formats, authorisation of payments (including at weekends), managing cash flows outside business hours and interaction with the ‘overlay’ services to be offered.

For a full set of relevant disclosures, please visit the link below.

View disclosures

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Australia’s New Payments Platform: Changing the Way Banks and Insurers Do Business
2016-12-08
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This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.

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