What is NPP?
NPP stands for New Payments Platform. NPP is an industry wide payment platform for Australia, providing national infrastructure for fast, secure, flexible and high data payments in Australia. It is a real-time low value payment platform.
What is the story behind NPP?
The payment system board of Reserve Bank of Australia reviewed and concluded the need of a real-time low value payment. This review identified opportunities for the Australian payments system to make payment in real-time. After which, the Australian payment network brought together industry representatives to form a “Real-Time Payment Committee”. Committee submitted proposals of NPP based on other international payment systems. Proposal recommended a ‘layered architecture’ for payment clearing and settlement for the new real-time wide range payment service to businesses, consumers, and government. In August 2014, “NPP Australia Limited” was formed to oversee the build, operation and management of Platform and went live In November 2017. At first, it was used among a small number of employees in the financial foundation to test NPP support and then on 13 February 2018, these foundations started rolling out NPP to their customers.
Which are the organizations that own NPP?
NPP is mutually owned by 13 organizations:
- Australia and New Zealand Banking Group Limited
- Australian Settlements Limited
- Bendigo and Adelaide Bank
- Citigroup Incorporation
- Commonwealth Bank
- Cuscal Limited
- Hongkong and Shanghai Banking Corporation
- INDUE Limited
- ING Bank Limited
- Macquarie Group Limited
- National Australia Bank
- Westpac Banking Corporation
- Wise Australia Pty Limited
How does NPP Payment work?
- The payer starts a payment through an online banking portal or mobile phone banking application.
- If payer chooses to use PayID to identify the payee, the payer’s foundation will send enquiry message to addressing services for payee’s BSB and account number linked to PayID. The legal account name allied with PayID will return to the payer for confirmation, which reduce the incident of misdirect and fraud.
- Payer foundation sends a message with all required payment details, related to any overlay service requirement, to the payee’s foundation using its payment gateway. Payee’s foundation clears the payment by checking payment details and sends a response back to payer’s foundation confirming it is able to credit the payee.
- The payer foundation’s payment gateway automatically sends a settlement request to Fast Settlement Service (FSS), which tests that the payer foundation has enough credit funds.
- FSS returns a settlement confirmation to both foundations indicating settlement has occurred.
- After confirmation of settlement, the payee’s authorized deposit-taking institution will make the fund available to the payee.
What are the benefits of NPP?
Ø 24/7 instant payments
Ø Real-time line-by-line settlement via RBA’s fast settlement services
Ø PayID, new and easy way to link financial account
Ø PayID, easy to remember identifier
Ø Open access platform
Ø Overlay services to consumers, businesses, and government
Ø Secure transaction
Due to the changing payment platform around the world, Australia proposed to bring NPP. So what are you waiting for? Be the change around you!
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