Delivering real-time payments for Australia

An update on the New Payments Platform

This year will be key for the development of the New Payments Platform (NPP), a new national infrastructure for flexible and scalable next-generation payments in Australia.

A major industry initiative, the NPP proceeded to the fourth phase, ‘build and internal test’, in August 2015.

The program of work is incredibly complex with a number of specialist working groups across planning, reporting, design, industry test management, operational procedures and regulations.

Indue is not only involved with developing the industry’s core infrastructure but will offer value-added overlay services for our clients. We are also on the Program Delivery Authority that oversees the NPP Program, along with senior representatives from the Australian banking and mutual sector and Australian Payments Clearing Association.

For the NPP to be operational in the second half of 2017 as planned, 2016 will be a significant year for everyone involved in the building, testing and implementation of the infrastructure. Here we look at the key phases in the development of the NPP.

Building the NPP

The planning and reporting working group developed and revised a number of documents last year to reflect revised governance processes, schedules and deliverables to support the delivery of Phase 4. In 2016, the design working group structure will be reformed into a smaller design authority with specialist working groups.

In October 2015, in a significant step forward for the program, BPAY won a competitive tender to deliver the payment service known as the ‘Initial Convenience Service’. This will be the first Overlay Service to utilise the NPP and will set the NPP apart from other real-time systems across the world. The service will allow consumers to immediately transfer funds to and from their bank accounts via their mobile phone, tablet or via the Internet.

October 2015 also saw a number of key achievements across all working groups, including the finalisation of the SWIFT ‘design and elaborate’ deliverables. SWIFT was awarded the 12-year contract to build and operate the basic infrastructure for the NPP in 2014. SWIFT has subcontracted US-based payment technology company Fiserv to help operate the ‘addressing service’ which will allow consumers and businesses to make payments using phone numbers, email addresses and ABNs.

Internal & industry testing

Testing on a project as technical and complex as this needs to be robust and rigorous. Each phase is a project in itself, requiring considerable coordination and technical expertise. A work plan has been developed and a final set of test requirement documents are being developed. The planning and reporting working group, industry test management working group and Project Management Support Office, provided by KPMG, have conducted a full review of the industry schedule and this process will continue with the mobilisation of a working group.

Now that the industry test management working group has discussed the process, scope and deliverables, the test planning for internal ‘solo’ and acceptance details has begun. The test requirements subgroup has also completed identification of test requirements and commenced the risk assessment.

What does NPP mean for the industry?

NPP will deliver Australia-wide transformation in terms of efficiency and productivity. Information and payments will travel together, allowing businesses to receive high-quality information directly into their back-office systems. This will reduce the burden of manual reconciliation, and free up staff resources for more productive activities.

The NPP will be a game changer and the catalyst to transform business and technology activities. Current batch processing and end-of-period collation will be replaced by real-time ordering. Processing and payment activities and NPP payments are likely to be incorporated into existing supply chains. Consumers and small businesses will benefit from immediate availability of funds and the ability to request and receive payments.

Indue will offer a number of services that use the NPP, including a simple API-based integration layer for ease of connectivity to the NPP, settlement services (potentially removing the need to build real-time settlement capabilities for ADIs) and stand-in capabilities to help our clients leverage the power of the NPP in delivering superior customer value.

To find out more about the NPP Program and other leading-edge technologies, contact a member of our expert team.

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