The New Payments Platform will drive a flood of new players and products into the Australian market and technology will no longer be a barrier to innovation in the financial services sector.
This is the view of NPP Australia chief executive, Adrian Lovney, who now spends most of his waking hours discussing connectivity on the NPP - as well as product development - with fintechs.
“They have got great ideas and the NPP gives them a platform to bring these ideas to life," he said.
Lovney likes to discuss the basic premise about the 'switch' and that is that that overlay service rules are flexible enough to aid innovation. For a start, he told AB+F, a fintech doesn’t need to have a relationship with a NPP participant before getting its idea heard.
“It can come to us and resister the new service before signing up with one of the 13 NPP members," he said. "Innovating from the edges will result in a number of new services being brought alive by start-ups."
Burst of activity
On the day NPP is switched on, Sharon Lu, general manager of Tyro Fintech Hub, is expecting to see a burst of activity as fintechs are ready to jump in, including from overseas.
"What excites fintechs - whether they partner with a bank or access NPP directly - is being able to program directly onto a model technology platform that enables them to do hitherto unthought of things,' she said.
To Lu, there is good reason why an October launch date for NPP was greeted with elation: the present delays and setbacks in real-time payments are enormously frustrating to the fintech community.
According to Lu, until Loveney came in and took charge, the future of NPP looked uncertain which is not helpful for a community with ambitions to solve some major problems.
"They have an appetite for big ideas, forging ahead and making breakthroughs and they will do this with or without NPP. So they’re working towards an NPP but if the NPP doesn’t happen they have a fall-back position," she explained.
“They are always looking at alternatives so if NPP can provide a solution that’s fantastic but if NPP can’t get there, they’ll figure out another way."
One part of puzzle
The upshot, according to Lu, is that fintechs are globally focused. They are sourcing money from the US and Europe and building global nodes so for them creating a service for Australia's new payments systm is just one part of the puzzle.
However, the Tryo fintech hub manager is far from pessimistic, adding that many fintechs are planning to release an 'early stage version' of their product with the hope that once the NPP goes live, they can switch on the full functionality they ultimately hope to introduce.
Fintechs have vision, Lu added, but what has caused some decision paralysis for them is that the NPP and blockchain still only modernise financial services some of the way.
"They are still behind web technology standards," she argued. "This is why blockchain is already seen as an alternative by both fintechs and the financial sector."
The question is can NPP and block chain work together. For Lu, that hook up is definitely on the cards.
At the end of the day, any blockchain fintech solutions which need to on- and off-ramp Aussie fiat currency will need to work through the regulator to access domestic market payment systems such as the NPP.
In the UK, blockchain remittance fintech start-ups are working through this through the Financial Conduct Authority's regulatory sandbox.