There’s been a lot of buzz lately surrounding the launch of the New Payments Platform. In mid-February this year, the New Payments Platform guided by the Reserve Bank was launched in Australia.
Individuals and businesses are now able to create a ‘PayID’, changing the way transfers are able to be made by moving funds instantly into other accounts. The new system enables instant transfers between accounts outside of business hours and on weekends too.
The use of BSBs and account numbers will still be in place, however unlike the traditional transfers which can take several days to clear, the new system allows this to happen instantaneously.
A user can create a PayID through their financial institution, meaning their mobile number or email address can be used as identifiers for instant transfers. Whilst the majority of banks have taken part in the new system, several bank have not, including Bank of Queensland, Suncorp and Rabobank. Some subsidiaries of the major four banks are not partaking in the new system including Bank of Melbourne and St George.
The pressure to build such a payment system in Australia was a result of a 2012 review by the Reserve Bank of Australia which found Australia’s payment system lagged behind that of less developed nations such as Mexico.
Surprisingly, uptake of the new payments system may be slower than you’d expect. Statistics from the U.K system ‘Faster Payments’ launched ten years ago, show a preference for the traditional transfer, even today.
Concerns over potential for instant fraud have been raised given the ease of access to this platform. A good reminder to take precautions when making any banking transaction and to use secure passwords.
- General Information on rollout and British Faster Payments.
- Reserve bank 2012 review document.