Instant Bank Transfers are here!
March 15, 2018
Written by Matt Rigby
It is 2018 and its baffling why it has taken the banks so long to come up with a method that will transfer money between accounts instantly, but finally it is here.
New Payments Platform (NPP) is being promoted to us as a “World Class” payments innovation that will allow 24/7 real time payments, every day of the year.
No longer will you have to remember cumbersome BSB and Account numbers, each account will have a unique identifier, which could be your email address, mobile phone number or for a business it might be an ABN or similar. This identifier will be called your “Pay ID”. The Pay ID is the address for receiving payments and effectively, is the alias for your bank account where transfers will be made to and from. That Pay ID will be linked to just one account, however you can have different Pay ID’s for your different accounts.
Once your Pay ID is set up with your bank, then it acts like a pointer so that anyone wishing to pay you money instantly, uses your Pay ID. The new platform also allows commentary of up to 280 characters, as opposed to the current limit of only 18 characters.
Example: you go shopping for a new guitar and you find one on special that you “must” have. Your credit card fails for some unknown reason. By using the New Payments Platform, the guitar shop gives you their Pay ID and you transfer them money instantly, and walk away with your new Rickenbacker.
The downside of this technology is that it also provides a new opportunity for hackers to move money very quickly. As the old batch clearing technology is now defunct, the banks will have to be much more vigilant with their authentication and security methods. There is even talk of voice biometrics being used to help curb the threat of fraud with the new instant payment technology.
The major banks have already have launched NPP and you can set up your Pay ID straight away. Some of the smaller banks and credit unions will come on line in the coming 9-12 months and all are expected to be offering real time payments by this time next year.