NPP rolls over cash and BSBs
The decline in cash - already well underway as a result of contactless payments and other automated card systems - will accelerate once the New Payments Platform is in place in 2017 Ryan Yuzon, a director with RFi Consulting, told an Australian Information Industry Association financial services briefing in Sydney on Friday.
By 2013, the number of cash transactions was down to 59 per cent after declining by two per cent every year since 1975. By 2018 we expect this number to be down to 43 per cent," Yuzon said.
Ian Pollari, financial services partner at KPMG, noted that once the NPP "railway tracks" are down, "true innovation" will begin.
And while he tipped one of the biggest changes will be the end of reliance on BSB as a unique account identifier for transferring funds, with the ability to use mobile phone numbers and email addresses coming into play, although panel members warned it will not simply open up new revenue streams.
John Baird, director of global technology production, Deutsche Bank, observed that monetising small value payments will be difficult but saw opportunities in the "rich data" capability that will be opened up through the NPP.
One example Baird gave for a consumer goods purchase via the NPP. "It should be possible to include warranty information in the rich documentation that came back to the consumer," he said.
While there may not be money to be made directly from such a transaction, some of the data captured in this way becomes valuable and can be monetised later on. More so than for mobile peer-to-peer transfer of funds at the consumer level, according to Pollari.
"The big challenge for any of these new consumer models is how to monetise them," he said.
Instead, Pollari predicted, some of the biggest winners from a fully functional NPP are likely to be the Australian banks' biggest business clients.
"In that corporate and institutional space, and particularly in [certain] industry segments, the ability to have real time entry of data and transactions can really present some opportunities," he said.
Another topic of discussion at the early morning briefing for IT industry professionals centred on progress by banks and other financial institutions towards better use of the masses of structured and unstructured data that they are collecting.
Deutsche Bank's Baird observed that when it came to the use of analytics and data, the clearest strategic outline of the "end game" he had seen came from the chief data officer of Wells Fargo, who advised companies "to offer less, but to do it at the right time".