''According to RFi Group research conducted in March 2018, close to a third of smartphone owners were aware of one of the two payment features.
The New Payments Platform (NPP), Australia’s faster payments service, went live in Australia in February of this year. Developed by Australian banks and financial institutions along with the Reserve Bank of Australia (RBA), the platform enables consumers to transfer money between banks almost instantly and also allows for more data rich payments. According to the Reserve Bank, the NPP provides consumers a “platform for innovation and competition in the provision of payment services”. Indeed, with faster payment speed and constant availability, the NPP could lead to greater usage of digital payment methods, as consumers can expect payments to be made quickly and more conveniently.
This market spotlight seeks to address the benefits of the NPP for consumers by utilising current research by RFi Group around usage of the NPP so far in Australia. In addition, this market spotlight will make mention of other faster payment networks offered around the world. A focus on Faster Payments Service (FPS) in the UK indicates that while the Australian equivalent may have been a late introduction, it has the potential to further perpetuate a digital economy.
What is available to consumers on the NPP? How often are these services used?
The first services to make use of the NPP are Osko and PayID. Payments can be simplified through PayID as the service allows consumers to link their account to an easy-to-remember identifier, such as their mobile phone number or email address. Payments made via PayID do not require a customer to enter the payee’s BSB and account number. Meanwhile, Osko, which has been developed by BPAY, enables consumers to send and receive payments instantaneously via participating banks. Osko provides the flexibility of using a customer’s BSB and account number or their PayID to send near-instant payments. Osko also allows customers to send a longer message, and even emojis, along with their payment.
The roll-out of PayID and Osko has been different depending on bank but both services are increasingly becoming available to Australian consumers. According to RFi Group research conducted in March 2018, close to a third of smartphone owners were aware of one of the two payment features. However, take-up has been slow, with just 13% of those aware of and 5% of those aware of Osko using the respective service to send a payment. In June 2018, awareness of PayID and Osko increased slightly, with 33% of smartphone owners aware of at least one of the services. These results could be a reflection on the length of time that the NPP has been available to consumers and are likely to increase over time. However, the fact that consumer awareness for PAYID and Osko remains relatively low, suggests it is unlikely that significant changes in consumer behaviour will occur until awareness of the NPP increases.
Like the NPP, the FPS in the UK allows for immediate 24/7 transfers online and over the phone. Currently in its tenth year of operation, the FPS has grown considerably in the number of payments made using the service. In July 2008, close to 5,000 single immediate payments were made through the FPS, compared to July of this year, where nearly 120,00 single immediate payments were made using the faster payment network. The increase suggests that time, in conjunction with growing digital engagement among consumers, has facilitated greater usage of the service.
The NPP certainly has the potential to deliver benefits for consumers. The convenience, speed and ease in which the NPP allows for payments to take place between consumers are among the biggest benefits attached to using services related to the NPP. While the NPP is still in it’s infancy, we can expect that we will see greater changes to consumer payments and banking behaviour as awareness and experience of the NPP increase.