Payments is an industry facing vast disruption – with fintechs, cross-channel offerings and new technologies such as Apple Pay just the start.
Key questions KPMG consultants in Payments often get asked include: “How great is tap-and-go?” “What do you think about Apple Pay?” or “Why does transferring money between people take so long?”
KPMG’s involvement in establishing the New Payments Platform (NPP) is significant to these conversations, as it is all about saving time, and saving money.
The NPP is the financial plumbing of the economy of the future. It is the fundamental infrastructure for Australia’s future payments system.
To continue this analogy, when your plumbing fails, it’s a major problem, and the same is the case for the payments system. It is fundamental at all levels of the economy.
When you call your plumber, they will book a time during business hours, as it can be impossible to find one available out of hours. Similarly, our current payments system is inflexible, and it doesn’t put the customer at the centre. Over the long term, it also frays the confidence and trust you have in the service and the relationship.
That is where the NPP comes in – it’s essentially ‘24/7 plumbing’. It is a payments infrastructure that allows money to be transferred in near real time, around the clock.
The Australian economy is well entrenched in the digital age, and the payments system has to proactively adapt. Customers demand instant gratification, and are quickly embracing innovative payments apps. A number of other countries are planning to introduce real time payments or already have. In order to remain internationally competitive, Australia has to do the same.
The Reserve Bank has recognised this, and strongly encouraged the industry to get on board. From this support, the NPP was born in 2013.
The NPP is a major industry-wide collaboration, with 13 authorised deposit taking institutions working together to develop a new payments infrastructure. Once the NPP goes live, we will have built four key innovations:
What does this mean for Australia? The NPP will touch every part of the economy and revolutionise the way corporations, governments and people interact with their finances.
This article originally appeared in the KPMG NewsRoom.