“This is a new platform, not a renovation,”
— Bob Masina, General Manager, Technology and Operations, New Payments Platform
How it works
The New Payments Platform works through three important parts:
1. The ‘Basic Infrastructure’
The Basic Infrastructure includes a network (which connects participants), a switch (which moves messages between participants via the network) and an Addressing Service which enables transaction accounts to be identified by a simpler payment address such as an email address, phone number or ABN number. The Basic Infrastructure will always be open for business, 24 hours a day, 365 days of the year.
2. The Fast Settlement Service
The Fast Settlement Service (FSS) is provided by the Reserve Bank of Australia. This world-leading capability enables every single payment made on the platform, regardless of its size, to be settled in real-time in central bank funds, across each financial institution’s Exchange Settlement Account (ESA).
3. Overlay Services
‘Overlay Service’ is the name the industry has given to innovation that can leverage the benefits of the Basic Infrastructure. These products or services could offer vastly different experiences, or similar experiences, and in many cases could compete with each other. This is where the New Payments Platform breathes life into innovation and competition.
The Platform uses ISO 20022, which is an International Organisation for Standardisation (ISO) format used for electronic data interchange between financial institutions or organisations able to move money and data. The benefit of ISO 20022 is that it is a global standard with messages able to convey more data than most other messaging formats.
Financial institutions regulated by the Australian Prudential Regulation Authority (Authorised Deposit-taking Institutions) can connect to the platform via NPP Payment Gateways. Some of these organisations will offer other organisations indirect access to the Platform.