Banking in a flash: A guide to the New Payments Platform (NPP)

After much speculation and fanfare, the New Payments Platform (NPP) has officially launched in Australia, ushering in what could be a number of momentous changes to the way Australian consumers and businesses do their banking.

But what is the NPP, what are the benefits it brings and what are the features you’ll need to know about now that it’s up and running?      

Read on for a comprehensive look at the NPP, PayID and Osko as well as some of the frequently asked questions about how this changes the way you bank.  

What is the New Payments Platform?

Originally announced in July 2013, the New Payments Platform is a collaborative effort between 13 of Australia’s biggest banks and financial service providers - including the big four banks and the RBA. But what is it? 

Well, in the same way that a series of interconnected tracks link different train stations together, the NPP has been likened to a ‘secure set of rails’ between banks. These newly developed rails are the infrastructure which allows the facilitation of faster, more convenient banking for Australian consumers and businesses.

What makes the potential of the NPP so momentous is the ability for innovators to ‘build on top’ of this infrastructure - utilising the platform to develop products - like Osko - which bring huge benefits to consumers.

What are the key features and changes of the NPP?  

Real-time transfers

Perhaps the shining light of the New Payments Platform is the ability for consumers to make ‘real-time’ transfers between different banks and providers. Gone are the days when transfers could take  three days between asking your mate to send you cash for those movie tickets, and the money actually hitting your account.

Operating 24/7, 365 days a year, the new platform will do away with lengthy wait times between transfers on weekends and public holidays - effectively bringing the banking system in line with much of the rest of Australia which is increasingly operating on par with the speed of the online world.

These real-time transfers are facilitated by the RBA-owned Fast Settlement Service which, put simply, provides the immediate settlement of transactions made by individuals and businesses through the NPP.

Simpler banking IDs

Raise your hand if you can recite your BSB and bank account number off the top of your head. That’s right, you’d need some serious memory skills to remember those two figures.  

Fortunately, the introduction of the NPP has brought with it a simpler, more convenient form of identification known as ‘PayID’. While you can read down further for a more detailed explanation of PayID, in essence it allows you to use a your phone number or email address (among a number of other choices) as an alternative form of banking ID.  

Richer transfer descriptions

Squeezing a useful transaction description into less than 30 characters can be frustrating to say the least, and often produces the kind of condensed nonsense my tech-challenged father (who seems to be under the impression that you’re charged by the character) is prone to sending in text messages.

Thankfully that character limit for transfer descriptions has been generously upped with the launch of the NPP, as Australians are now able to use up to 280 characters (including emojis) to describe their transfers.

What is PayID?

It’s Saturday night. You’re out to dinner with a group of friends at that new Egyptian place down the road and when it comes time to pay you’re the one who cops the bill (because the restaurant doesn’t split and you’re sitting closest to the counter). While logging on to your online bank account to look up your BSB and account number to give to yours friends isn’t the biggest inconvenience, it sure would be handy if there was a simpler alternative… well now there is thanks to PayID!

Rolled out as part of the New Payments Platform, PayID won’t actually be replacing your BSB or account number - think of it more as a linked ID that you can give to your friends to receive payments instead of having to remember your BSB or account number.

What can I use as my PayID?      

For most consumers, their email address or a mobile number will be the most convenient forms of PayID to set up, but if you have a business you can also choose to use your ABN (Australian Business Number), Australian Company Number (ACN), Australian Registered Body Number (ARBN), or Australian Registered Scheme Number (ARSN). Just bear in mind that depending on your bank, you might not have a choice of all of these forms of potential PayID.

If you have multiple accounts with different banks you’ll also only to be able to link one PayID with one account, but you will be able to set up multiple PayIDs. For example, say you have one transaction account with the Commonwealth Bank and another with ING, you’d need to set up one PayID (your mobile number for example) for the Commonwealth Bank account and another PayID (your email address) for the ING account.

How can I set up my PayID?     

With well over 50 different banks, credit unions and building societies already offering their customers the opportunity to set up PayIDs, you'll be able to find the information you need to setup your own PayID on your bank's respective website or in-app.

What is Osko?

The first ‘overlay service’ which utilises the infrastructure of the New Payments Platform, Osko rolled out to consumers in early 2018 and it's now available via a range of banks and financial institutions.

Produced by the creators of BPAY, Osko works in a similar way, but instead of paying your bills, you're able to use the Osko service to make transfers to your friends and family.

You’re essentially able to use the service in the same way you would make transfers using your bank’s mobile app or website, but instead of the normal transfer process you’ll be given the option to select the ‘Osko’ option which will provide you with the benefits of real-time transfers and PayID.

Got more questions about the service? Our handy Osko guide will give you an even more in-depth analysis of the everything Osko.

Frequently Asked Questions

1. Do I have to download an app to use the NPP, PayID or Osko?

No you don’t. As mentioned above, the New Payments Platform is the infrastructure itself which will make real-time payments and other features possible, while PayID and Osko are available through your existing bank’s (if they've signed up) app or website.

2. Do both the payment sender and recipient need to have Osko for it to work?

Yes, your financial institution must be on board with Osko to be able to utilise the (near) instant transfers between different institutions, as will the person you’re wanting to transfer to or receive money from.

3. Are the NPP and Osko free?

While the NPP (which is a not-for-profit collaborative venture) will charge financial institutions to use of its platform, it will be up to your individual bank, credit union or building society to either absorb the cost or pass on some sort of fee. There is also no current information to suggest that customers will need to pay a fee to use Osko.

4. Will I have to change my regular payments like bills and rent if I sign up for PayID?

No you won’t. While PayID may act as a more convenient form of banking ID, it is still linked to both your BSB and account number - neither of which are going anywhere soon according to NPPA.

5. What happens if I make a transfer to the wrong person using Osko?

While it’s too early to say if there will be any different steps to take in case you make an incorrect transfer using Osko, you can take a look at this advice which goes through the process you’ll need to follow if you make a mistake with a regular transfer.

6. Are these new changes safe?

According to Osko, all the payments you make using the new service “...are subject to participating institutions real-time fraud screening and detection capabilities.” However, concerns have been tabled about a potential increase in scams and fraud now that payments can be made almost instantly.  

7. Can I transfer my PayID to a different bank?

Yes, if you decide to move to a different banking provider you can certainly transfer your PayID over as well. You’ll also be able to easily update your PayID if you change your email address or phone number - you’ll just need to close the old one first.

Participating Banks

As of December 16, 2020, there are over 60 Australian banking providers with NPP integration in the Mozo database: 

  • 86 400
  • ANZ
  • Australian Military Bank
  • Australian Unity
  • Bank Australia
  • Bank First
  • Bank of Melbourne
  • Bank of us
  • BankSA
  • BankVic
  • Bankwest
  • bcu
  • Bendigo Bank
  • Citi
  • Coastline Credit Union
  • Commonwealth Bank
  • Community First Credit Union
  • Credit Union SA
  • CUA
  • Defence Bank
  • Endeavour Mutual Bank
  • Family First Credit Union
  • Firefighters Mutual Bank
  • G&C Mutual Bank
  • Gateway Bank
  • GMCU
  • Greater Bank
  • Health Professionals Bank
  • Heritage Bank
  • HSBC
  • Hume Bank
  • Illawarra Credit Union
  • IMB Bank
  • ING
  • Macquarie
  • MOVE Bank
  • MyState Bank
  • NAB
  • Newcastle Permanent
  • P&N Bank
  • People's Choice Credit Union
  • Police Bank
  • Police Credit Union
  • QBank
  • Qudos Bank
  • Queensland Country Bank
  • RACQ Bank
  • Regional Australia Bank
  • Rural Bank
  • South West Slopes Credit Union
  • St.George
  • Summerland Credit Union
  • Suncorp
  • Sydney Mutual Bank
  • Teachers Mutual Bank
  • The Capricornian
  • The Mutual Bank
  • UniBank
  • Unity Bank
  • Up 
  • Westpac

RELATED: Mobile payments: a guide to paying with your smartphone

Interested in learning more about the latest technology in banking? You'll want to check out our fintech and neobank hubs for the latest news, guides and reviews. Or if you're looking for a new bank account with the latest features, why not get started with some of the great offers in the table below. 

Compare bank accounts - rates updated daily

Search promoted bank accounts below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Everyday Options

    account fee
    Payment Options
    interest rate
    $0.00
    Apple Pay, Google Pay, PayID
    0.01% p.a.

    An easy, everyday banking account packed with flexible options to help you spend, budget and save better. Create up to 9 sub accounts.

    Go to site
    Details
  • placeholder
    Orange Everyday

    account fee
    Payment Options
    interest rate
    $0.00
    Apple Pay, Google Pay, PayID
    0% p.a.

    Rebates on ATM fees anywhere in Oz. No ING international transaction fees. Zero monthly fees. Winner of the Mozo Experts Choice Awards 2020 for Exceptional Everyday Account.^

    Go to site
    Details
  • placeholder
    Global Currency Account

    account fee
    Payment Options
    interest rate
    $0.00
    PayID, Samsung Pay
    0% p.a.

    Send and receive foreign currency with no Citi transfer fees. Consolidate your international bank accounts with account details for up to 10 currencies. Winner of Mozo Experts Choice Exceptional Everyday Account 2020 award^.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Everyday Snap Account

    account fee
    Payment Options
    interest rate
    $0.00
    Apple Pay, Google Pay, PayID, Samsung Pay
    0% p.a.

    Enjoy $0 monthly account fees and unlimited fee-free card, phone and online transactions. Tap and pay with Google Pay, Apple Pay or Samsung Pay. Refund of overdrawn fees and international ATM withdrawal fees and international card transaction fees^.

    Go to site
    Details
  • placeholder
    Go Account

    account fee
    Payment Options
    interest rate
    $0.00
    Apple Pay, Google Pay, Samsung Pay
    0% p.a.

    Enjoy earning Virgin Money points on purchases (conditions apply). Bundled with the Virgin Money Boost Saver. No Account fees. Available as a joint account.

    Go to site
    Details