What you need to know about the New Payments Platform

We’ve all wished bank transfers could instantly reach our account, whether we’re desperate to receive our monthly pay packet or we’re waiting to be reimbursed by a friend over a split bill.

Gone are the days of waiting for payments to reach your account. The New Payments Platform is set to transform the way Australians spend money.

What is the New Payments Platform?

The New Payments Platform (NPP) put simply is a new payment system in which Aussies will be able to send each other money in real time.

The NPP will allow real-time payments between two or multiple people, meaning you’ll never worry about weekends or holidays delaying payments again.

How does the NPP work?

According to the NPP website, the NPP works in three parts:

  1. The ‘Basic Infrastructure’

The Basic Infrastructure includes a network (which connects participants), a switch (which moves messages between participants via the network) and an Addressing Service which enables transaction accounts to be identified by a simpler payment address such as an email address, phone number or ABN number. Other address types may be available in the future. The Basic Infrastructure will always be open for business, 24 hours a day, 365 days of the year.

  1. The Fast Settlement Service

The Fast Settlement Service (FSS) is provided by the Reserve Bank of Australia. This world-leading capability enables every single payment made on the platform, regardless of its size, to be settled in real-time in central bank funds, across each financial institution’s Exchange Settlement Account (ESA).  This allows for completion of settlement between financial institutions prior to crediting of the payee’s bank account.

  1. Overlay Services

‘Overlay Service’ is the name the industry has given to the payments related products or services, and that can leverage the benefits of the Basic Infrastructure. These products or services could offer vastly different experiences, or similar experiences, and in many cases could compete with each other.

This technical explanation simply means that the infrastructure of NPP allows for real-time payments between two or multiple people in under a minute. It is active “24 hours a day, 365 days of the year”, and backed by the Reserve Bank of Australia (RBA), so the platform is fast and secure.

It’s no secret that most of us can’t remember their BSB and account details off by heart, making the transferring of money a longer process when you have to go hunting for these details. This is where PayID comes in.

What is PayID

Forget remembering pesky BSB and account details, now when you want someone to send you money you can give them your PayID instead. 

Your PayID is something easy to remember that you will register, such as your:

  • Email address
  • Mobile number
  • Australian Business Number (ABN)
  • Australian Company Number (ACN)
  • Australian Registered Body Number (ARBN)
  • Australian Registered Scheme Number (ARSN)

This will be securely linked to your bank, credit union or building society account.

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How does PayID work?

Once the NPP and PayID is rolled out, this is how the process will work:

  1. Register – when the NPP is rolled out you will be prompted to register through your bank, credit union or building society.
  2. Choose your PayID – you will choose your easy to remember PayID linked to this account.
  3. Pay – You will now be able to give someone this PayID and they will pay you in real time.

According to the PayID website, the registration process will require a number of identification and verification steps to confirm you are the rightful owner of that mobile number and/or email address etc. This also means PayID will make fraud more difficult as a stranger will not easily be able to create a PayID using your personal details.

A PayID can only be linked to one account at any given time. You can, however,  create as many PayIDs as you’d like “as long as you can prove to your bank, credit union or building society that you are the rightful owner of that information (such as the phone number or email address) you’d like to use”.

Can I use it for international transfers?

Unfortunately, the NPP only applies for national payments. Moving forward, hopefully this model will be adapted to allow for instant international transfers.

How secure is PayID?

In terms of security, the first thing you should keep in mind with PayID and the NPP is that you can only use it to pay other people. No one can use your PayID to access your account or withdraw your money.

Further, when you want to make a payment you will now see the name of the person you are sending money to (registered through their PayID) before you approve the transaction. This will mean that unlike using a BSB or account number, payments on the NPP using PayID will now give you peace of mind that you’re sending money to the right person.

As payments will now reach accounts in under a minute, there is the risk that your bank, credit union or building society may be slower to catch any scamming or fraud on your account. Luckily banks currently protect their customers in real-time through tools that monitor your payments, and these tools will be extended to cover the New Payments Platform.

You should always be wary of scammers when it comes to online banking. Read ASIC’s Money Smart handy guide to reporting a scam.

What other changes can we expect with the NPP?

  1. Pay with emojis

On a fun note, the NPP will now allow you include emojis in your payment descriptions! However it’s up to you how you decipher what emojis are for which transactions.

  1. Sent documents 

When you make a transaction through PayID, you will now be given the option to attach documents to the payment, including invoices and receipts. 

  1. Never have an awkward bill moment at dinner again

Instant payments through PayID means that no longer will Aussies have to awkwardly chase up their friends for the dinner bill. All you’ll need to do is provide your fellow diners with your PayID (mobile number, email address) and the money will be instantly back into your account.

New Payments Platform Explained:

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Learn more about bank accounts

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

Can you find your bank account number online?

If your bank offers online services, you should be able to find your bank account number online by logging into your account on your bank’s website and checking your details there.

Keep in mind that each type of account you have with a bank comes with a unique account number. This means if you have a bank account as well as a savings account, for example, your bank account number and your savings account number will be different.

If you don’t have access to your bank account online or can’t login, you should be able to find your account number on a mailed bank statement, if you have one.

Alternatively, you can call your bank’s customer service number or visit a branch to retrieve your account number.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.

How do I transfer money from Paypal to my bank account?

Transferring cash from Paypal into your bank account is simple…if you have a Paypal account that is.

Once you’re logged into your Paypal account, the account balance will appear on your home page. Below your balance are two options:

  • Add money
  • Withdraw money

Choose option two if you want to transfer money from your Paypal account to your personal bank account.

The next screen will prompt you to either enter new bank account details or choose a bank account that’s connected to Paypal. You can always add more bank accounts to your Paypal profile.

Another way to transfer out of Paypal is by jumping to the wallet tab on the top menu, and clicking ‘transfer money’. Both options will give you the same result.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.