JK: The NPP was developed initially as a retail real-time payments system but has evolved to help businesses and large institutions. For companies, the data richness of the platform is absolutely a key feature.
I think as we start to move towards open data and an open-data economy, we will begin to look at how that data richness can be used to drive further efficiencies.
International payments will be another step change for NPP. If we are moving across the world to market infrastructure that is real time, available 24/7 using similar standards, we end up working towards real-time global payments, which is really cool.
LM: It’s interesting you mention data. What we're seeing in our digital channels at the moment is for every payment made, there's probably an associated four pieces of de-identified data that come with it. And the hunger for data from our customers and the industry is just immense.
I think that is a really important lens to place across the opportunities NPP and faster payments can create, simply because of the level of data accessibility on payments that traverse the networks.
This data provides a huge opportunity to reveal insights and help solve problems for participants all the way along the line.
CY: The complexity of the data is also worth considering. At ANZ our customers typically make payments and send remittance information through separate channels, usually in the form of a piece of paper mailed in the post, email or even a fax. Sometimes it is through a portal or some other electronic document. The point is, with traditional payment structures, the payment and associated information travel on a completely separate set of rails.
The challenge is often getting that information from each set of rails and then identifying which payment goes with which remittance advice.
The fact each item is travelling on two separate rails is a problem to solve for, and one that the NPP aims to address.
At its most basic level, having the data travel with the payment is going to solve that very first problem – let alone what is actually being paid for. That’s a massive improvement on other payment types. It really solves quite a material issue.
LM: I recall doing a study a little while ago on receivables, around how much it costs to reconcile the payments that hit your account. It’s a bit old, but it found the cost was anywhere between $A35 or $A50 per payment.
I can recall at the time having to develop a heap of receivable-type solutions, just so we could work out who had paid us.
I think we underplay the importance to businesses of being able to receive cash in a timely manner and then deliver for their customers. This is a big problem for businesses, including ANZ customers, that the NPP has the potential to solve quite remarkably.
JK: I guess what we're working towards and aiming for with the NPP is sort of a minimum standard for customer experience, which we really don't have today.
Really, our payment systems today largely depend on how a bank does something. For the recipient, they don't really have control over that because they don't have control over the how the payment is made.
With the NPP, we have near real-time processing, and data that comes with which is rich and useful and applicable.
That then creates a significantly higher minimum standard of service for banks to compete around, which ultimately provides benefits for the businesses and customers that deal with them.
Arun Kayal is Associate Director, Communications & Shane White is Content Manager, ANZ Institutional
You can read the second part of this conversation HERE.