Modernising Australia’s account-to-account payment system was the focus of a recent webinar hosted by Australian Payments Plus (AP+). The webinar followed the release in March of the RBA Risk Assessment on BECS Decommissioning, and explored how newer systems like the NPP are positioned to support evolving user needs. 

The webinar featured Ellis Connolly, Head of Payments Policy at the Reserve Bank of Australia (RBA), and Luke Wilson, Chief Operating Officer at Australian Payments Network (AusPayNet), alongside AP+ Executive Sponsor of the Move to NPP Katrina Stuart, and  Adrian Lovney, AP+ Chief Payments and Schemes Officer. 

Kicking off the webinar, Stuart provided an update on the various enhancements and uplifts underway for the NPP, and shared that more and more businesses and end users are starting to plan their migration to the NPP. 

“And with that modernisation journey, there is a spectrum of options available in terms of taking either a more gradual and phased approach, where back-office processes initially remain largely unchanged, or implementing change upfront, allowing businesses to realise some of the benefits of NPP a bit earlier on,” said AP+’s Stuart. 

“We’re also increasingly seeing businesses starting to pilot, and do proof of concepts to test and learn in areas where they see greatest benefit,” added Stuart. 

Understanding the role of BECS and the shift ahead 

RBA’s Connolly acknowledged that while BECS – the system underpinning bulk direct payments since the 1990s – continues to provide reliable service at a low cost, it is increasingly challenged by expectations for more efficient, data-rich, and automated payments.  

“BECS is – to some extent – fully depreciated infrastructure that has a low transaction cost, but also hidden costs in terms of the manual processing associated with the system,” Connolly said. “And if we were to maintain BECS, it would likely require further investment to ensure it stays fit-for-purpose.” 

Stuart pointed out that industry had also expressed a desire to focus on investing in just one system, not two. 

“What we hear from industry is to avoid having to invest in two systems in parallel, and instead focus on what needs to happen to uplift the modern payment systems that we have today,” said Stuart.

Connolly pointed to key features of the NPP – such real-time settlement, enhanced data capability, and services such as PayTo and Confirmation of Payee – as examples of how payments innovation can improve efficiency and safety. 

Stuart agreed, saying “We’re seeing a growing desire from end-users to start transitioning payments across and start benefiting from some of that modern capability, particularly around things like payee validation, payment certainty, and the fact that it’s always available.”  

Developing a shared vision aligned to the public interest 

A key recommendation from the RBA’s risk assessment was the need for a common industry vision for the future of account-to-account payments, and one that reflects the public interest. 

According to Connolly, this means building a system that is “accessible, affordable, reliable, safe and secure,” and where end-user needs are embedded in infrastructure development.  

“We think it’s really important that the payment system operators and administrators are able to engage directly with end users to make sure that their needs and use cases are taken into account in the development of the central infrastructure,” he said. 

In the context of the migration, coordination between the two operators is also a priority.  

“Payments are moving from one system – BECS, operated by AusPayNet – to another system – NPP, operated by AP+. It’s logical for the two operators to be able to work together in a coordinated way to manage that transition and to help address the risks that arise from it,” said AP+’s Lovney. 

The ACCC granted interim authorisation for AP+ and AusPayNet to coordinate industry efforts on the future of account-to-account payments in early May.  

Supporting bulk payments and payday super 

The webinar also touched on the NPP’s role in support upcoming changes to superannuation, with Stuart confirming that the implementation of payday super does not require a dedicated bulk capability. 

“Employers can continue to send batch files to their payroll provider, and the financial institution has the capability to process these payments individually.”  

While it’s not needed for payday super, AP+ is working with industry on a bulk solution (multi-credit transfer) for a certain number of use cases where high-volume bulk processing will generate efficiencies. 

Watch a recording of the full webinar below. 

To read more about the latest NPP developments, including enhancements underway: An update on the initiatives to support the move to NPP - Australian Payments Plus