Real-time payments enable businesses and financial institutions to process payments seamlessly. It’s ‘always-on’, meaning businesses can make instant payments anywhere and anytime, including weekends and public holidays.
Real-time payments in Australia are done through the New Payments Platform (NPP) – an open access infrastructure that facilitates fast payments. NPP Australia combines speed, data and communication in order to execute a payment in a matter of seconds.
Potential use cases
Real-time payments have different applications across industry segments. Below are some potential use cases of how real-time payments have bettered business payments processing in Australia:
• Insurance: immediately transfer emergency relief claim funds to customers 24/7.
• Telecommunications: accelerate receipt of funds and be notified of paid overdue invoices.
• Property: reduce reliance on bank cheques for house settlements.
• Government agencies: make urgent welfare payment(s). Real-time payments could also extend to ATO tax refunds in the future.
• Retailers: process customer refund requests via PayID instead of a cash refund. This reduces reliance of on-site cash.
• Remittance: customers no longer have to wait 1-2 business days to receive funds in their bank accounts.
• Utility companies: process a customer request for refund of overpayment or incorrect charges in real-time.
• Auction Houses: pay vendors for goods sold on their behalf. Customers can also pay for goods purchased at auction.
PayID is a faster, more convenient digital payments option
PayID is a simple and cost-effective way for small businesses to receive payments from customers in real-time. A diverse range of small businesses are increasingly offering PayID as a payment option to customers.
During the COVID-19 pandemic, many small businesses have pivoted quickly to be able to provide remote, contactless payments methods. Many businesses now offer PayID as an option.
PayID has brought a whole new level of convenience to online banking. It’s made transferring money easier, faster and more straightforward. Businesses and consumers no longer need to remember lengthy bank account numbers such as BSBs and ACCs.
They only need to remember their PayID – a phone number, or email address. PayID has made payments services faster and more convenient.
Real-time payments are essential
In addition to the real-time movement of funds, the New Payments Platform (NPP) provides real-time confirmation of a payment. Businesses know immediately whether or not a payment has been successful.
Organisations can also get real-time access to enhanced data and reporting via APIs which can be used for automated reconciliation.
Traditionally, payments systems have been accessed either directly or indirectly via a direct participant, typically a bank.
NPP Australia provides overlay services such as Osko whilst the Reserve Bank of Australia provides the Fast Settlement Service (FSS). The FSS enables every single payment made on the NPP regardless of its size, to be settled in real-time in central bank funds.
Providing real-time payment options is the customer experience that millions of businesses not only desire, but require. In a hyperconnected world, fragmented payment systems that keep money unnecessarily tied up for days are detrimental for both businesses and consumers.
Financial institutions must be able to provide their customers with real, usable money in real-time. With the NPP, Australian payments are not only faster, they are more data rich. Payments now include more information to enable efficient and automated processes.