Direct Debits 2.0 – NPP’s Consent & Mandate Service
The NPPA have collaborated with New Payment Platform (NPP) Participants to implement additional functionality on top of the standard NPP payment offering with the Consent and Mandate Service (CMS).
The NPP rang in its first birthday last month, which marks one year from the launch of the New Payments Platform and its first overlay service, Osko. Since its launch, there are now 75 banks offering NPP in the Australian market and a month-by-month growth of approximately 20%^.
It is clear that the banks, consumers and payment industry in general have all embraced the first product offering on these real-time payment rails. Now the real excitement comes from what new and innovative ideas will surface to take advantage of this new payment stream.
Consumer-Driven Direct Debits
The NPPA have been busily collaborating with NPP Participants to implement additional functionality on top of the standard NPP payment offering – Consent and Mandate Service (CMS). The NPP CMS is a direct debit alternative enabling consumers to setup recurring payments with service providers. This process is similar to the establishment of a direct debit request, but in the real-time and digital context.
The other departure from the current direct debit model where the merchant holds the authority is the fact that the consumer is in control of the payments. The consumer specifies the amounts, the related merchants and the cadence and duration of the payments. Consumers will be required to provide their consent and instructions for a particular recurring payment, which will be securely stored in a central repository that can been accessed via APIs by the financial institutions or authorised third parties involved with the transaction. The use of this central store will be extensible to non-payment related transactions, which could include account information (i.e. account balance).
The NPPA have undertaken extensive research and engagement of merchants and consumers to understand current experiences with direct debit and key pain points from both end points. This information will feed into multiple working groups that are currently taking place amongst all NPP Participants to develop the technical solution and business processes that will underpin this initiative. Indue is heavily involved with these ongoing industry workshops to ensure the final solution is aligned with our value proposition to our clients.
New May NPP Webinar
Indue will be holding a complimentary webinar May 1 where we will consider the impacts one year on from the launch of the NPP and look ahead to the next 12 months, which will include the new consent management service. Find out more about the webinar here.
As the scope and project timelines are established at an industry level, Indue will reach out to all of our NPP clients to keep them up-to-date on progress and next steps.
^ Source: Reserve Bank of Australia