A priority for the payments industry in 2024 will be getting started on the transition of all domestic direct entry electronic payments from the Bulk Electronic Clearing System to the New Payments Platform, which may prove to be a very challenging project. Treasury Jim Chalmers announced last June that a move to phase out BECS and shift all domestic direct entry electronic payments to the NPP is a key part of the modernisation of Australia’s payments infrastructure and regulation. In response the industry set a deadline of 2030 for completion of the project. It sounds like plenty of time but in December Reserve Bank governor Michele Bullock warned that the NPP needed significant investment in capacity upgrades and reliability improvement if it is to replace BECS. BECS is used for processing such payments as salaries, welfare payments, recurring payments to merchants and account-to-account transfers. The industry’s view is that the move from BECS to the NPP will take a lot of work, but it will deliver benefits. Speaking at last year’s Australian Banking Association conference, Westpac chief executive Peter King said: “With BECS you can’t check the name of the account you are moving funds to. The NPP allows you to do that and that will help with detecting scams. “It is faster and at scale it will bring down costs. Another benefit is that you can transfer a lot more information with payments.” In addition, BECS only processes payments on business days, it is a batch processing system and payments can only be addressed using BSB and account numbers. But in a speech in December, Reserve Bank governor Michele Bullock warned that “there are some significant challenges that will need to be overcome for the industry to successfully transition all BECS payments to more modern payments systems”. Bullock said some financial institutions are not yet connected to the NPP, while others that are connected have not yet made all accounts accessible. She said Australian Payments Plus and financial institutions will have to add additional capacity to ensure that current BECS payments can be processed reliably through the NPP. And financial institutions will have to improve the reliability of their NPP services. The RBA’s data “show a substantial rise in the number and total duration of operational outages in recent years, with NPP services being the least reliable”. Bullock said: As more volume shifts from BECS to the NPP, it is important that providers improve the reliability of their NPP services. There will be even less tolerance from the community for outages to NPP services when most wages and benefit payments start going through the NPP. “Improving the reliability of NPP services across the industry will be a major focus of the RBA over the coming years.” Speaking at an industry forum convened by payments company Zepto last week, Katrina Stuart, general manager of business payments at AP+, said the group was addressing these issues. Stuart said: “We have a requirement that banks using the NPP are up 24/7. That is mandatory and we can apply a non-compliance charge. We are working through it with