The Reserve Bank has told the big banks it expects them to implement NPP Australia’s new PayTo facility and has given them until April next year to get the payment initiation service up and running.
NPP Australia, which is now part of Australian Payments Plus, is going live with PayTo at the end of June and had hoped to have most of the banking industry ready by then. But last month, industry sources revealed that ANZ, NAB and Westpac would not be ready.
PayTo has been designed to allow a “payer” to authorise third parties to make payments on their behalf. The service is similar to a direct debit arrangement but NPP Australia is betting that it will have superior features to direct debits and will replace them.
People will be able to use PayID when they set up payment arrangements, rather than using their BSB and bank account number. Payers will have greater visibility over their mandate payment arrangements and greater control.
PayTo is an add-on to the New Payments Platform.
The Reserve Bank’s head of payments policy, Ellis Connolly, said the RBA has been in contact with the three banks and they have indicated that they will meet the April 2023 deadline.
He added that the RBA expects the industry to implement the NPP roadmap and is encouraging all participants to deliver PayTo no later than April next year.
Speaking at the Real Time Payments Summit in Sydney yesterday, Connolly said the New Payments Platform has met the RBA’s strategic goal for a real time payments system, with more detailed remittance information and greater user convenience (by using PayID).
But Connolly said the system needed to be better. He wants the industry to do more to encourage take-up of PayID. There are currently 10 million registered PayIDs but only 16 per cent of Osko payments are made using PayID.
He said the reliability of NPP services is below service levels provided in branches, at ATMs and for card payments, as measured by the average downtime per provider last year.
“The outage data indicate that some industry participants need to do a better job of delivering reliable NPP services to their customers. The Payments System Board is closely monitoring NPP provider reliability, which will become increasingly important as usage of the NPP continues to grow,” Connolly said.
The RBA wants to improve access to the system for payment service providers and has started work on a set of common access requirements to help support access to payment systems, including the NPP.
And the RBA wants NPP Australia and its parent, Australian Payments Plus, to play a role in supporting the wind-down and eventual closure of the direct entry system and migration of account-to-account credit transfers from direct entry to the new payments platform.