What you need to know about the New Payments Platform

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.


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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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.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

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.

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.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

How do you open a bank account under 18?

If you’re under 18 and you want to open an Australian bank account, you will need your passport or birth certificate. (Some lenders might require just a Medicare card or driver’s licence.) You can apply online or at a branch. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

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 can I check my bank account balance online?

Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.

What do I need to open a company bank account?

To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.

Can you get a payday loan without a bank account?

Yes. Some payday lenders are willing to transfer loans to prepaid debit cards instead of bank accounts.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

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)