A key example of that is a development the NPP has on its current roadmap for the end of 2021, with market availability currently anticipated early 2022. The industry body, together with NPP participants, is looking to introduce a debit-based function which will materially shift the capability of the NPP.
The Mandated Payments Service (MPS) will allow users to authorise third parties to initiate payments from their bank accounts using the NPP.
Similar to traditional direct-debit services, businesses will be able to receive scheduled, recurring payments from consumers, all with the real-time nature of the NPP, creating an improved digital experience for customers and opening up numerous opportunities.
These span the migration of traditional direct debits such as utility bills or school fees, but will also enable exploration of opportunities in ‘new economy’ services such as rideshare, food delivery, online content delivery and the like.
The upside of all this from a corporate perspective is businesses will be able to act on and receive funds more quickly than they otherwise would over the existing payment rails, provide an enhanced account-based payment option for their clients, and potentially see lower payment processing costs.
Businesses will ultimately benefit from the greater transparency and control over their direct debits consumers will enjoy.
Mandated direct debits will be set up in a centralised store for consumers to access, set-up, update and cancel, which is a material extension on existing capability.
In an ideal state, consumers will be able to perform these functions within their existing bank digital banking services, leveraging the familiarity, utility and security inherent in financial institution banking apps.