Real-time payments coming to Australia in 2017

Sick of waiting days for a transfer to go through from one bank account to another at a different bank?

Me too.

Well, those days are officially numbered according to the Reserve Bank of Australia (RBA). A new payments platform (NPP) will allow bank customers to transfer funds in real time using just a phone number or email address, 24 hours a day, by the end of 2017, according to the central bank.

Thirteen of Australia’s largest financial institutions, including Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) are working with international telecoms cooperative SWIFT, which is building the infrastructure. SWIFT already facilitates billions of international interbank transfers and secured communications.

The RBA is doing its bit as well, building a Fast Settlement Service (FSS).

And before you think this is still a long way away, basic test payments are already being made through the FSS and SWIFT’s infrastructure. BPAY has been appointed as the first overlay service to use the NPP.

NPP Australia says it remains committed to launching the NPP in late 2017.

This is also a much more sophisticated system, allowing much more information to be transferred alongside the funds. Invoice payments could be transferred alongside the invoice, perhaps allowing the details to be imported into accounting systems.

That will have implications for the likes of accounting software providers Myob Group Ltd (ASX: MYO), Reckon Limited (ASX: RKN) and Xero FPO NZX (ASX: XRO). Customers are likely to want as much information as they can get, and the new payments platform should make fund transfers ‘data rich’ and easily addressed.

Personally, I can’t wait.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has a position in Xero FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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