The New Payments Platform’s $19 million superannuation bonus

The NPP (New Payments Platform) is set to revolutionise the Australian payments industry. It is also set to offer a range of ancillary benefits to consumers, business and government.

Take for example, Australia’s $2.5 trillion1 superannuation industry, which handles millions of payments between employers, superfunds, members, insurers and other industry participants.

The industry invested heavily in the creation of SuperStream to improve the contributions process. This was a great improvement on the processes of the time, but was limited by the available payments technology. With SuperStream, payments and their associated data move separately, relying on clearing houses to aggregate and distribute payments.

Issues still remain with misplaced payments and delays in getting money into members’ accounts, often from incorrectly filled forms or inconsistencies between documentation and payment data.

The introduction of the NPP, enables real-time clearing and settlement for simple or complex payment solutions, between two people or between many. It’s a game changer leading to massive increases in efficiency in sectors like superannuation. A recent white paper, The New Payments Platform and Superannuation: a revolution in efficiency, jointly developed by CBA and KPMG shows the switch to real-time payments powered by the NPP could bring a $19.2 million benefit to superfund members as well as other ancillary benefits to members, employers and funds.

Currently, when funds are transferred into super accounts, there is an average two-day lag in the monies arriving in accounts. The NPP allows for significantly more data to move with the payments and near-real time settlement. In the best scenario a payment could arrive at its destination 15 seconds after it is sent by the employer with all the data needed for easy reconciliation by the superfund. Near instant payments mean funds and members would be earning interest far faster.

Taken against the total FY17 contributions of $116.9 billion, $19 million is a relatively small amount. However, it is just the start of how the NPP can benefit all parties in the superannuation industry.

The next opportunity is to think about how member top ups, payments to members and other transactions in the system could be improved using the enhanced data, real time 24/7 settlement and alternative identifiers available from leveraging the NPP. Overall it shows how the sector can use technology to transform, demonstrating their commitment to innovation to provide members with a better experience; delivering increased efficiency, value for money and benefits to both superannuation funds and their members.

The NPP has the potential to help the industry be more flexible, more member centric, more transparent, and to offer a seamless experience.

The NPP infrastructure is here, bringing exciting possibilities for wide range of industries. Now businesses need to engage with the ecosystem, collaborate and co-design to deliver on what’s needed to make a better experience for customers, and in the end, to put money back in our pockets.

1 According to ASFA, Australian super assets were $2,324 billion at the end of June 17.


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