With a rumoured launch date sometime in February, the countdown to the much-awaited New Payments Platform (NPP) - which is set to transform the Australian banking landscape - could be just a matter of weeks away.
While much of the pre-launch hype has been focused on the benefits to individual consumers, the new platform will likely also make banking far more convenient for Australian businesses as well.
Incoming: (near) instant payments
One of the biggest gripes for business owners is the common delays they receive when being paid, with a 2017 Parliamentary Inquiry into Payment Times and Practices finding that small businesses have to wait an average 25 days past the due date in order to receive payments.
The forecasted ‘near-instantaneous’ transfer speed between different institutions provided by the NPP platform (and it’s first overlay service Osko) could prove a boon for business - both in the ability to make transfers and in cutting down the average payment time.
“What’s world-leading about the NPP is that it’s been built to evolve and be flexible to changing consumers’ and businesses’ needs over time,” said Philip Joyce, Managing Director of Payments at Westpac and Board Director of NPP Australia.
“The first to be rolled out will be Osko by BPAY, a super-fast payment option available via digital banking channels 24/7, 365 days a year that will result in cash being transferred, visible online and available almost instantly. Australian consumers, businesses and governments will derive value from these services.”
Convenient payment reconciliation
Under the new platform, both business and consumer bank account holders are expected to have far greater flexibility, thanks to a number of changes to the current BSB and transaction description systems.
Instead of relying on a BSB for identification, businesses owners will soon be able to create a new ‘Payment ID’ using their existing phone number, email address or even an ABN number, while the existing 18 character transaction description limit will be upped to 280 characters.
Even more so than individuals, the flexibility of being able choose a more practical and identifiable form of Payment ID, such as a phone number or email address may allow businesses to easily switch between banks in order to take advantage of better offers, rather than being shackled with the same provider.
Both changes are anticipated to make the reconciliation of payments far simpler, as will the promised integration with accounting software such as MYOB and XERO.
If you’re a business owner thinking about taking advantage of the imminent NPP changes by looking for a better deal on your business bank account, head over to the Mozo business banking comparison hub today, or if you’re happy with your existing bank make sure it’s one of the initial providers to sign up for the NPP!