A $1 billion overhaul of Australia's payment system has passed a key milestone, with all big four banks now offering near real-time payments to most of their customers.
After banks were last year criticised for taking too long to roll out a fast payment service, Westpac has switched on the new payments platform (NPP) for 3.6 million accounts, it said. It plans to roll out access for customers of St George and other brands it owns over 2019.
Westpac customers can now move money via the new payments platform, with St George and other brands to follow later this year.
Westpac had previously only been offering fast payments to customers in some smaller states, not its home base of NSW, but the bank now believes it is contributing about a third of all the payments being processed on the NPP.
The NPP, launched last February, is a system that allows consumers to make money transfers that will settle within minutes, compared with today, where it can take up to three days for funds to arrive.
It also allows customers to transfer money to an external account without entering a BSB or account number, by registering for a "PayID" such as a mobile number or email account.
Although there are still gaps in how customers can access these faster and simpler payments, Westpac's launch is significant because it means all four major banks are now offering some degree of NPP service.
The Reserve Bank, which last year said some banks had been too slow in rolling out the service, has previously emphasised the importance of "ubiquity" before a system such as the NPP can gain "critical mass."
Di Challenor, general manager of global transaction services at Westpac, said the bank was now sending consumer payments made through the Westpac brand to the NPP by default, and it had started a pilot for institutional bank clients.
"I think this year is definitely a tipping point," Ms Challenor said.
"This is what Australia has needed for a long time - a real-time payment system to stay ahead, or at least align, with the other fast growing economies in the world."
Ms Challenor said 98 per cent of Westpac's payments on the NPP were settling in less than five seconds, and about 70 per cent of its payments from mobile devices were being processed via the NPP.
"If you cannot do NPP on a mobile, you're challenged," Ms Challenor said.
Although all four major banks have now launched a fast payments service using the NPP, there are still some gaps in how consumers can access the system.
An ANZ Bank spokesman said the bank was not yet offering NPP payments on its mobile app, but it was available to retail, small business and business customers via the bank's website. ANZ believes it is responsible for about 60 per cent of the value of payments being made on the platform.
Commonwealth Bank last month told users via social media that in order to use the NPP's fast payments, they had to send payments to a user via a PayID, not a BSB or account number. A CBA spokesman said that since its launch last year, around 985,000 customers had registered for a Pay ID.
National Australia Bank, in contrast, said customers could make NPP payments on internet banking or with a mobile, and they could make and receive fast payments with a BSB or account number, as well as with a PayID. NAB said it was processing about 3 million NPP payments a month.
"As people become more familiar with fast payments, we expect the use of PayIDs to continue to grow,” said NAB's general manager of payments, Paul Franklin.
A spokeswoman for NPP Australia said there were 52 million accounts that could make NPP payments, it was focused on lifting the number of payments made on the platform.
Re-disseminated by The Asian Banker from Sydney Morning Herald