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Payments System set for major overhaul

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In Australia, our payments system has always been slow and difficult. But the payments revolution is coming!

It can take a few days to transfer money to another FI (financial institution) and you need to know the exact BSB and account number, otherwise your money can disappear.

The NPP is coming!

For many months now, First Option has been working on a project called the NPP – the New Payments Platform. It’s a brand new infrastructure for payments which is being developed by Australia’s banking industry, including the RBA.

Think of the NPP as the plumbing system that connects everything together. It’s more of an industry term that won’t be heavily advertised. Instead, you will hear terms like Osko and Pay ID – but more about them later!

Big Benefits to First Option members

When the NPP starts, there will be a number of immediate benefits.

  • Speed. It allows people to make payments in near real-time.
  • Available 24x7. Send or receive money any time of day or night.
  • Greater information. Send more information with each payment, rather than just 55 characters.
  • Simpler to transfer. Transfer money to someone using their mobile number, email address or other common information (known as a Pay ID), rather than using their BSB and account number.
  • Certainty. When you transfer money using the NPP you will receive confirmation that it’s going to the right place.
  • Easy to receive. Money can be sent to you via your mobile number, email address, etc. rather than giving out your BSB and member number.

And more benefits will become available as more services are added in future.

The NPP is not far away

First Option and the entire banking industry have a comprehensive testing regime to complete before the NPP will be available to the public. We anticipate the NPP will ramp-up from October 2017 and we will be able to confirm this closer to the date.

Registering for the NPP

Members will need to register for the NPP, but they cannot do so yet. It’s not going live until later this year. First Option will contact you when you’re able to register. Members will be able to register for a Pay ID through First Option, as well as make payments through the NPP.

Pay ID makes payments easy

The most exciting part of the new system is the introduction of the “Pay ID”. This is a smart address for payments. The Pay ID links someone’s bank or credit union account to a recognisable and memorable piece of information the person uses in everyday life – such as their phone number or email address.

A Pay ID can only be linked to one bank or credit union account at a time, but accounts can have more than one Pay ID. A Pay ID can be a phone number, email address, ABN or ‘organisation ID’ such as a company name.

BPAY introduces Osko

BPAY was awarded the contract to build the NPP’s first ‘overlay service’. Overlay services are built on top of the NPP infrastructure and will allow greater functionality.

BPAY’s service is called “Osko” and will allow people to send payments directly from their bank and credit union accounts, 24x7, to friends, businesses and the government.

Osko by BPAY is the main way that people will use the NPP in the short term; it ensures a consistent experience when making payments via the NPP.

First Option will be part of the NPP

While the NPP is an industry-wide initiative, it’s up to each individual FI to put forward its own plans. However, the large majority of Australians will be able to make real-time payments using the NPP.

Rest assured, First Option will be connecting to the NPP so that members can enjoy fast and easy payments, 24x7.

Fraud Prevention

Fraud levels in Australia are very low compared to global standards and we expect this to continue. Australian FIs have some of the most sophisticated fraud detection technology and methods in the world.

We have also learned from other countries where real-time payments have been implemented and will be adding extra fraud detection methods and collaborating with other Australian FI’s and law enforcement when the NPP goes live.

An important point to note is that NPP payments need people to authorise the transfer of money out of their account. This has nothing to do with the most common type of fraud in Australia which is ‘card not present’ fraud. This is normally where card details are fraudulently obtained and used to purchase things online.

First Option also uses SMS one time passwords to add another layer of security to transactions.

First Option needs your Contact Details

This is a huge project for First Option that will benefit most First Option members. As we get closer to the launch, we will contact members to let them know how to register.

In the meantime, please ensure that First Option has your current mobile number and email address.

To update your contact details, please Contact Us or do it yourself. Login to Internet Banking, go to My Preferences > Update Contact Details > Get SMS one time password > Contact Details