Reserve Bank of Australia governor Dr Philip Lowe says that take-up of the PayID system — which is based on the New Payments Platform — has so far been “less than earlier industry projections”.
The NPP has its public debut earlier this year. The platform enables 24/7 real-time inter-bank payments as well as “data enriched” transactions, allowing payments to include longer descriptions than previously as well as have documents attached.
The NPP also underpins PayID: A new system that allows alternatives to a BSB and account number as a way of identifying the recipient of a payment.
Since the February launch, some 1.8 million people have registered a PayID, Lowe last week told the House of Representatives’ Standing Committee on Economics. Typically, that PayID has been a mobile phone number.
The NPP is run by NPP Australia Limited, which was founded by major financial institutions including ANZ, Australian Settlements Limited, Bendigo and Adelaide Bank, Citigroup, the Commonwealth Bank of Australia, Cuscal Limited, HSBC, Indue, ING Direct, Macquarie Bank, NAB, and Westpac, as well as the RBA.
The failure of PayID take-up to meet forecasts “partly reflects the fact that a number of the major banks have been slow to make the new system available to all of their customers,” Lowe said.
“They are now making it available, so we expect take-up to increase.”
Many of the nation’s smaller financial institutions “have done a better job,” offering the service to their customers, the RBA governor said: More than 50 of them were ready on day one of the new platform.
“Despite the relatively slow start, we still expect that the new system will provide the bedrock upon which further innovation in Australia’s payment system will be built,” Lowe added.
The RBA head said that the bank’s Payments System Board is “keeping a close eye on access arrangements so that those with new ideas and better ways of doing things can use the new system”.
RBA assistant governor, financial system, Michele Bullock said that the main reason for the slowness to support the NPP, at least for some of the major banks, was that their builds turned out to be more complicated than they expected and they experienced problems with service providers.
“They had many, many years to get on top of this and so to discover, as we were going live, that they weren't ready, was a bit disappointing really,” she said.
“Having said that, a couple of the majors who have not been on board to date are coming online, and we're starting to see volumes rise.”
Bullock added: “The key to this is that, because it’s a network, unless you've got everyone on board, it’s really not going to get use because I’m not really going to be interested in joining it if I can’t pay someone who banks with someone else. It’s critical that we have everyone on board and, in the next month or so, we will have all the majors on board and I think that will be a big stimulus”