NPP Australia is on track to launch its next payment initiative in the middle of next year, when it will start offering a payment pre-authorisation service, PayTo.
PayTo will allow a “payer” to authorise third parties to make payments on their behalf. The service is similar to a direct debit arrangement but NPPA is betting that it will have superior features to direct debits and will replace them.
NPPA chief executive Adrian Lovney said PayTo would give payers greater visibility over their mandate payment arrangements and greater control.
Speaking at an NPPA update yesterday, Lovney said it would be easier for payers to pause or cancel a payment arrangement using PayTo than current direct debit arrangements allow.
People would be able to use PayID when they set up payment arrangements, rather than using their BSB and bank account number.
Banks will be pleased to wash their hands of direct debits. Last month, the Banking Code Compliance Committee reported that banks complied with customers’ requests to cancel a direct debit on only around 70 per cent of cases.
The BCCC said the level of non-compliance was “a significant cause for concern”.
Lovney said benefits of PayTo for authorised third parties would include real-time validation of a customer account at the time the mandate is created, funds availability check at the time of payment, confirmation of payment and notifications of changes to mandate status.
He said part of NPPA’s plan was for PayTo to play a role in Treasury’s move to introduce payment initiation into the Consumer Data Right, so that consumers could authorise third parties to make payments on their behalf.
“We expect PayTo will be one way to support payment initiation under CDR,” he said.
Jessica Robinson, an assistant secretary at Treasury and director of its CDR work, said Treasury would look to leverage existing infrastructure as much as possible in its development of CDR.
Speaking at the NPPA update, Robinson said: “We will set standards for payment initiation but we will be agnostic about systems. We want to avoid duplication as much as possible.”
Lovney said he was pleased with the overall development of the New Payment Platform. It has 105 organisations connected and 76 million accounts making or receiving NPP payments.
The number of account holders using PayID has grown 60 per cent to 8.6 million over the past year.