New Payments Platform

The New Payments Platform (NPP) is Australia’s national fast retail payments infrastructure for account-to-account payments. Publicly launched in February 2018, it enables participating financial institutions to send and receive payments in near real time, with richer payment data, PayID addressing and 24/7 settlement through the Reserve Bank of Australia’s Fast Settlement Service.^[1][2]

Background and rationale

The NPP was developed after policy work by the Reserve Bank of Australia (RBA) and its Payments System Board identified shortcomings in Australia’s retail payments system. The RBA’s strategic review of innovation in payments concluded that the domestic system needed faster payments, richer data with payments, simpler addressing, and availability outside traditional banking hours.^[3]

Before the NPP, many Australian account-to-account retail payments used the Bulk Electronic Clearing System, commonly called Direct Entry. Direct Entry was efficient for bulk payroll, direct debit and recurring transfers, but it was not designed as a real-time retail payments system. Payments often depended on batch processing and business-day settlement, and payment descriptions were limited compared with the data capacity later introduced through the NPP.^[2][4]

The NPP was therefore conceived as shared infrastructure rather than a single consumer product. It provides “rails” on which banks, other financial institutions and payment service providers can build services. Its design aimed to support competition by allowing different overlay services and user experiences to operate on common, interoperable infrastructure.^[1][2]

Launch and ownership

The platform opened to the Australian public on 13 February 2018. At launch, the RBA and Payments System Board described it as an important addition to Australia’s payments infrastructure and a platform for innovation and competition in payment services.^[1]

NPP Australia Limited was established to oversee development and operation of the NPP. The platform was developed by a consortium of 13 financial institutions, including the RBA, and involved collaboration among major Australian banks and other payment-sector participants.^[3][5]

In 2021, the Australian Competition and Consumer Commission (ACCC) authorised the proposed amalgamation of BPAY Group, eftpos Payments Australia and NPP Australia under a new holding company, Australian Payments Plus (AP+), after accepting a court-enforceable undertaking. The ACCC noted that BPAY, eftpos and NPPA were Australia’s three domestic payment organisations involved in the proposed merger.^[6]

Following the amalgamation, the NPP continued as a distinct scheme and infrastructure within the Australian Payments Plus group. The RBA’s materials describe the NPP as operated by NPP Australia Limited, with cooperation arrangements among the RBA, Australian Payments Plus Limited and NPP Australia Limited for resilience and observance of financial-market-infrastructure principles.^[2]

How the NPP works

The NPP is designed for fast, data-rich, account-to-account payments. A participating institution sends a payment instruction through NPP infrastructure, the receiving institution receives the instruction, and settlement occurs across Exchange Settlement Accounts at the RBA through the Fast Settlement Service (FSS).^[2][4]

The FSS is the settlement component built and operated by the RBA. It allows NPP transactions to be settled individually on a 24/7 basis in close to real time, rather than accumulated for deferred net settlement at a later time. This is a core distinction between the NPP and older batch-based retail payment arrangements.^[2][4]

The NPP uses ISO 20022 payment messaging, which supports richer data than older Australian retail payment systems. RBA materials have contrasted this with the short remittance information available in Direct Entry payments. Richer data can assist reconciliation for businesses, government agencies and software providers by allowing more information to travel with the payment.^[2][4]

NPP payments are not limited to conventional business hours. The infrastructure was designed for continuous availability so payments can be initiated, received and settled during weekends, public holidays and overnight periods, subject to the availability, risk controls and customer-facing systems of participating institutions.^[2]

PayID and addressing

PayID is the NPP addressing service. It allows a payment to be addressed to an identifier such as a phone number, email address or Australian Business Number, rather than requiring the payer to enter a BSB and account number. RBA consultation materials describe PayID as an NPP service that can use a registered phone number, ABN or email address for payment addressing.^[7]

The aim of PayID is to reduce the friction and potential error involved in account-number-based payments. In ordinary use, a payer may see the registered PayID name before confirming the payment, giving an additional check that the payment is being directed to the intended recipient. The degree to which that confirmation is displayed, and any payment holds or fraud checks, depends on the participating institution’s customer interface and risk systems.

PayID is not itself the payment movement mechanism; rather, it is an addressing layer associated with NPP payments. The payment still moves through NPP infrastructure and is settled through arrangements connected to the FSS. This distinction is important because some NPP payments may be made using BSB and account details, while others use PayID identifiers.

Osko and overlay services

Osko was the first consumer-facing overlay service launched on the NPP. Operated by BPAY, Osko enabled fast payments between participating bank accounts and became one of the earliest ways Australian consumers encountered the NPP in internet and mobile banking.^[5]

An overlay service is a product or service that uses the NPP’s basic infrastructure while adding particular rules, branding or functionality. This architecture reflects the NPP’s role as shared infrastructure: the core platform can transmit and settle payment messages, while services layered above it define customer propositions and specialised use cases.

Osko helped introduce instant or near-instant account-to-account payments into ordinary Australian banking. However, not every fast payment in Australia is necessarily described to the customer as Osko, and not every participating institution exposes identical functionality. Banks and payment providers may use different labels, interfaces and risk controls while still relying on the NPP’s underlying infrastructure.

PayTo and payment initiation

PayTo is a major later capability built on the NPP. RBA materials describe PayTo as a service that allows households and businesses to authorise third parties to initiate NPP payments from their bank accounts.^[8]

The policy importance of PayTo is that it extends NPP use from payer-initiated transfers to authorised payment initiation arrangements. This makes it relevant to recurring bills, subscriptions, account-to-account commerce and payment initiation under broader open-banking and Consumer Data Right policy discussions.^[8]

PayTo is sometimes discussed as a potential substitute for certain direct debit or card-on-file use cases, although adoption depends on banks, merchants, payment service providers and end-user behaviour. It differs from traditional direct debit because payment agreements can be authorised and managed through participating financial institutions and NPP-related infrastructure rather than through legacy debit authorities alone.^[8]

International Payments Service

The NPP has also been extended to support inbound international payment use cases. The RBA has referred to the NPP’s International Payments Service as a capability expected to increase the end-to-end speed of payments coming into Australia.^[8][9]

In traditional correspondent banking, a cross-border transfer may move through several intermediaries before the final Australian dollar leg reaches the recipient’s account. The NPP’s role is focused on the domestic Australian leg: once an inbound payment is ready to be paid out in Australian dollars, NPP infrastructure can enable faster crediting to a recipient account at a participating institution.^[9]

This use case shows that the NPP is not only a domestic person-to-person payment mechanism. It can also serve business, government and cross-border payment flows when participants build services that connect external payment processes to the NPP’s domestic account-to-account infrastructure.

Access and participation

Access to the NPP has been an important policy issue since launch. Because the NPP is critical shared infrastructure, questions of direct participation, indirect access, technical requirements, settlement obligations and competition have attracted RBA and industry attention.^[3][7]

The platform was initially developed by a consortium of 13 financial institutions, including the RBA, but many additional institutions and payment service providers have reached customers through direct or indirect arrangements. In evidence to a 2019 Senate committee, the RBA stated that the NPP had been developed by a consortium of 13 financial institutions and that around 100 entities were then offering NPP payment services to customers.^[10]

Direct participants generally need to meet scheme, operational, technical and settlement requirements. Other organisations may connect through sponsoring or intermediary arrangements. This structure reflects a balance between resilience and access: a real-time national payments system requires strong operational controls, but overly restrictive access could limit competition and innovation.

The RBA’s reviews of NPP functionality and access led to recommendations including stronger transparency through published roadmaps and the ability for NPP Australia’s board to mandate core capabilities across participants within specified timeframes.^[8]

Regulation and oversight

The NPP sits within Australia’s broader payments regulation framework. The RBA has a statutory role in payments system policy through the Payments System Board, and it also operates the Fast Settlement Service used by the NPP. The Council of Financial Regulators provides coordination among major Australian financial regulatory agencies, while competition issues may involve the ACCC.

The RBA, AP+ and NPP Australia have established a memorandum of understanding related to safety and resilience and to assessment against the CPMI-IOSCO Principles for Financial Market Infrastructures.^[2] This reflects the NPP’s systemic importance as shared infrastructure, even though it is primarily used for retail payments rather than wholesale securities or derivatives settlement.

The ACCC’s role was particularly visible in the 2021 authorisation of the amalgamation of BPAY, eftpos and NPPA. The authorisation was granted after a court-enforceable undertaking, indicating that competition considerations were central to the consolidation of major domestic payment schemes.^[6]

Consumer protection, fraud, scam mitigation and mistaken-payment handling are also relevant to NPP use, though they are addressed through a combination of scheme rules, bank processes, industry codes, regulatory expectations and general law rather than by the NPP’s technical infrastructure alone.

Economic and market significance

The NPP changed the baseline expectations for Australian account-to-account payments. Consumers and businesses increasingly expect payments between bank accounts to be fast, available outside business hours and accompanied by more usable descriptions. This has affected competition among banks and payment providers, including the major banks such as Commonwealth Bank of Australia, Westpac Banking Corporation and National Australia Bank.

For businesses, faster settlement and richer remittance information can improve cash-flow visibility and reconciliation. For government agencies, NPP infrastructure can support faster disbursements and collections when integrated into payment systems. For payment service providers, it provides a domestic alternative to card-based rails for certain account-to-account use cases.

The NPP also interacts with the economics of payment costs. The RBA has studied pricing for account-to-account payment services across BECS, BPAY and the NPP, reflecting policy interest in how wholesale, intermediary and end-user fees influence payment choice and competition.^[9]

However, NPP adoption is not uniform across all payment contexts. Cards, BPAY, Direct Entry, cash, wallets and other payment methods continue to serve distinct use cases. The NPP’s significance is therefore best understood as adding a fast account-to-account layer to Australia’s payments mix, rather than replacing all older systems immediately.

Relationship with other Australian payment systems

The NPP coexists with several other Australian payment systems. Direct Entry remains important for bulk recurring payments, payroll and debits. BPAY remains widely used for bill payment. eftpos and international card schemes remain important for point-of-sale and online card transactions. High-value payments use separate infrastructure, and cash remains relevant for some users and contingency purposes.

The creation of Australian Payments Plus brought BPAY, eftpos and NPPA into a common corporate group, but the ACCC and AP+ materials stated that the schemes and brands would continue separately.^[6] This means the NPP should not be treated as identical to BPAY or eftpos, even though they are part of the same broader domestic payments group.

The NPP is most closely associated with real-time account-to-account transfers. Its distinctive features are speed, 24/7 settlement, data-rich ISO 20022 messages, PayID addressing, and the capacity to support overlay services such as Osko and PayTo.^[2][7][8]

Risks, resilience and operational issues

A real-time payments platform creates benefits but also different operational and risk-management requirements. Faster payments reduce the time available to detect fraud before funds move, making scams and mistaken payments important areas for banks, regulators and payment schemes. Institutions may apply holds, additional authentication or transaction monitoring to manage these risks.

Operational resilience is also central. Because the NPP is used by many institutions and supports always-on payments, outages or degraded performance can affect customers beyond ordinary business hours. The RBA’s cooperation arrangements with AP+ and NPP Australia on safety and resilience reflect this infrastructure role.^[2]

The NPP’s richer data capability can support compliance and reconciliation, but it also requires banks and payment providers to maintain modern messaging and processing systems. Participation therefore involves not only legal membership and settlement arrangements but also technical readiness, cyber security, operational capacity and customer-support processes.

See also

The NPP is closely connected with the Reserve Bank of Australia, Australian Payments Plus, Australian Prudential Regulation Authority, Australian Securities and Investments Commission, and the Australian dollar. It is part of the broader infrastructure that underpins Australian banking and retail payments.