NPP’s Road Ahead
Since the launch of the New Payments Platform (NPP) in early 2018, the payments industry has collectively made over 55 million accounts accessible to NPP payments, registered more than 2.8 million PayIDs and continue to make 500,000+ NPP transactions on a daily basis.
In addition to the new payment stream gaining steady momentum, the NPPA will be sharpening their strategic focus for the near future on the back of critical findings commissioned by the RBA.
RBA Recommendations Report
The RBA released a report last month on the functionality of, and access to, the NPP. After public consultation and assistance from the Australian Competition and Consumer Commission (ACCC), the report outlines 13 recommendations that addresses the issues identified during the consultation. The key recommendations involves:
- enabling fair and open access to the platform for both customers (via NPP participants rolling out NPP services to their entire customer base) and payment service providers (via amendments to regulations to allow for non-ADI entities to potentially become an NPP Participant)
- providing visibility of additional NPP functionality that the NPPA have committed to develop via a semi-annual product roadmap publication
- more transparency of NPPA Participant application outcomes and summary of key reasons in cases where applications were not supported by the NPPA
- providing more visibility on transaction fees
In a statement following the release of the RBA conclusions paper, the NPPA welcomed the comprehensive analysis undertaken and confirmed their intent to continue to enhance the capabilities of the NPP that would be available to be utilised by parties outside of the Platform or built upon by overlay service providers.
NPPA will provide a comprehensive public response by the end of July.
NPP Strategic Focus
Over the past year, the NPPA have identified a number of opportunities to further enhance and optimise the existing product functionality to meet the needs of a range of stakeholders and end users.
Extension of the API Framework
The NPPA published its first version of standardised APIs for NPP in late 2018. The second version of the framework, which was released in May 2019, will see the extension of the API set to include different NPP functions, such as cancelling a payment, requesting a payment return and notification of a payment. The NPPA has established an API sandbox, which is a secure, cloud-based test environment that enables developers to test API solutions in an environment that is independent from the NPP basic infrastructure. This test environment will continue to evolve over time with the expansion of the API framework.
QR Code Standards
Last month, the NPPA released a standard for the use of QR codes to generate NPP payment messages. The standard defines the mandatory data elements required to initiate an NPP payment via a QR code. This new capability can be applied to a range of use cases, such as bill payments, invoices, e-commerce and eventually point-of-sale payments.
Consent and Mandate Management Service (CMS)
The solution design phase for this new service is nearing completion. The CMS is a service to facilitate the creation and secure central storage of customer-authorised recurring payment instructions across different financial institutions. The CMS will provide customers with more visibility and control over their payment authorisations. It is anticipated that this new capability will enable an easier transition for customers to switch banks by allowing them to manage their payment authorisations and update the links to bank accounts themselves.
The NPPA will explore opportunities to enable the platform to support broader forms of payments with a key emphasis on unattended payments. Payroll, tax and superannuation payments will be the three main types of unattended payments that will be considered. The NPPA aims to leverage the existing NPP ISO20022 standard to support these payment types, as the messages provide structured data fields to carry a richer data set in comparison to its direct entry equivalent. The NPPA will define the specific message elements for each type of payment.
Third-Party Payment Initiation
Using payment initiation messages, an authorised third party can initiate a payment on behalf of customers of a financial institution or request payments to be made by a customer. The NPP was designed to support these types of messages, but the industry deferred the implementation until after the full launch. These new messages will support key use cases, such as authorised third parties initiating payroll, superannuation and tax payments on a customer’s behalf.
The NPPA believe that the development and delivery of these capabilities will significantly enhance the platform’s functionality and drive further use of the platform by third parties and end users.