The imaginatively named New Payments Platform (which is a great name until it's replaced one day) promises to make it easier to send money between parties. One of the first applications to use the NPP will be PayID. It will let you send money to other people without having to remember annoying details like BSBs or account numbers.
You create your own unique identifier and funds can be moved between parties in near real-time - no need to wait for batch runs of payments between financial institutions. But how do you get in on this?
The New Payments Platform (NPP) isn't a new banking product. It's a payments platform upon which the banks can offer their own products. For example, if you're a Westpac customer, then you'll need to activate their Pay to Mobile service in order to use Osko - a payments system that leverages NPP.
As each bank makes the service available to their customers they'll be notified - at least that's what the good folk at PayID say.
Step 1 - Create your PayID
Depending on which bank you're with, the sign on process to use PayID will vary. But the crux is that you connect a unique identifier - most banks are suggesting you use your mobile number or an email address - as an easy-to-remember reference to the BSB and account number you associate with the PayID service.
If you're a business, you can also use PayID to receive payments from customers. It's not just a consumer banking service.
Step 2 - Sending and receiving money
When you want to send someone a payment, simply request their PayID. Then you can use your online or mobile banking service to send the payment to that PayID, rather than the BSB and account number.
To receive money, just give the other party your PayID and they do the same from their online or mobile banking app.
As some banks will be using the Osko platform to use your PayID for transactions, you may find your bank uses that name rather than PayID to identify the service.
What makes this special?
PayID is only part of the benefit for users. The real benefit of the NPP is that those payments will be processed by the banks, building societies and credit unions within a minute. That means no more waiting hours or, in some cases, days for payments to be processed.
That's the big benefit of the NPP in my view. PayID is simply a service that takes advantage of the new platform.
When can you get it?
As I said, some banks are already offering PayID while others will be coming on board soon. The real benefit will come when there's a critical mass of banking customers using the system. That won't take long as more banks and financial institutions come online.
You can look your bank up to see where they're at.