New payments platform could create army of fintech innovation, says NPP boss
The man overseeing the rollout of Australia’s new payments system says every business across the economy that makes or receives payments could become a fintech innovator by developing “overlay” services to enhance customers’ experiences.
Construction of the “new payments platform” (NPP), which from October will allow money and data to move between bank accounts instantaneously, has been driven by the Reserve Bank of Australia for the past four years after an earlier bank-driven idea for a similar system collapsed.
The core philosophy of the NPP is the separation of the infrastructure – which provides a messaging, addressing and settlement system – from a layer for new products that will be offered by a broad range of potential disruptors.
In his first interview since joining NPP Australia as chief executive last year from Cuscal, Adrian Lovney assuaged any fears that the banks would be able to stifle access to the platform.
“There is not much point spending more than $1 billion on building a brand new set of railway tracks if there is nothing rolling on them,” he said.
“We will see how it unfolds over time but interest from the market place is really strong. At the core of the NPP offering is collaborating around building a set of [payments] rails once, and then letting the market decide what to use them for.”
NPP Australia, whose presence in its new George Street digs in Sydney is still identified by an A4 sheet of paper taped up to the glass door, has three main roles: operating the system (in collaboration with Swift, which is building it); governing access (by approving requests from those wanting to provide so-called “overlay services”); and growing use (the NPP will operate alongside existing payment options).
Rules governing the overlay services have already been agreed and are currently awaiting approval by the Australian Competition and Consumer Commission.
They have been written to allow a broad range of companies – such as those in the utilities, retail, transport, insurance or government sectors – to develop new payments services, either in competition or collaboration with banks or fintech start-ups, Mr Lovney said. The NPP will ultimately reduce the use of cash in the financial system, he added.
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