What does Australian business need to be asking about the New Payments Platform?
Just like that, 2017 is upon us and with it comes the New Payments Platform (NPP). The infrastructure will have far-reaching implications for individuals, governments and corporates; it will also present tremendous new opportunities.
This new fast set of financial rails will encourage innovation and heighten customer expectations.
The challenge is who will be ready and who will be left behind?
The NPP has been in the works for a number of years and will deliver real time, data rich, addressable payments to Australian institutions and consumers. Say you are out for lunch, and the restaurant doesn’t allow split bills. Not a problem. The NPP will allow you to pay your share direct to your friend’s mobile number, write a short essay in the description and the cash will move in real time. The money will be in their bank account by the time they are back at the table.
Business in Australia will be simplified and accelerated, and with the NPP’s launch just over the horizon, there are five questions corporate and government should be asking themselves.
- Is my back-office ready?
With real time payments coming into my ledger, customers are going to demand real time acknowledgement and information. Equally, the NPP will provide me with the chance to streamline my reconciliation operations. Are my systems, people and processes ready for this?
- Can I reduce my ‘cost of funds’?
Managing the inflow and outflow of working capital and liquidity is perpetual in banking, and the NPP allows real-time movement of money. How is this going to impact my treasury department and how can I take advantage of this new way of working to bring down my cost of funds?
- Will it match my customers’ expectations?
Customers are even more demanding in the digital age and as the acceptance of the NPP grows, customers’ expectation will rise. How can we ensure a seamless customer experience?
- Can I reduce payment errors?
I currently rely on my customers to enter our details correctly when being asked for payment. This leads to a myriad of errors and lost payments. How can I use NPP to remove some of the pain in this process?
- What can I do with all the available data?
Data is king and the NPP will allow a substantial increase in free form data; from 18 characters to 280. The ability to include links to documents with payments is a huge upside. How can I leverage this extra data to best serve my customers as well maximising my own insights and potential sales opportunities?
The NPP is a once in a generation shake-up and a fundamental step forward in how money moves around the Australian economy. The threats and opportunities this new set of rails provides to individuals, corporates and governments are significant.
So, who will position themselves for first mover advantage and how will the wider economy adapt?
Peter is a Director in KPMG’s Payments Advisory Practice and is currently the central Industry Program Manager for NPP.
Any views expressed in this presentation are the views of the writer and are based on proprietary material and/or publicly available information. These views are independent of New Payments Platform Australia Limited, the Australian Payments Clearing Association, individual payment system participants, or the PMSO provided by KPMG.