The modernization of the direct debit system suffers a setback
The new PayTo service, which is expected to upgrade the existing Direct Debit scheme under the RBA’s New Payments Platform (NPP), is facing delays after a number of banks indicated they would not be not ready to launch in July as planned.
In a speech at the Real Time Payments Summit on Tuesday, the head of the RBA’s payments policy department, Ellis Connolly, said “several of the big banks” had indicated they could not meet the schedule. to which the industry was committed.
“We recognize the significant effort and investment required to grow PayTo, and the challenge of delivering multiple key payment initiatives at the same time,” he said.
“Nevertheless, these delays will significantly limit service availability and the realization of benefits for end users.”
Mr Connolly explained that PayTo would provide a convenient and secure way for households and businesses to authorize third parties to initiate NPP payments from their accounts while giving customers more control.
“PayTo is a way to provide the payment initiation functionality that was envisioned as part of the consumer data right. It will also open up new opportunities for innovation and has the potential to deliver significant benefits to end users” , said Mr. Connolly.
RBA Governor Philip Lowe has written to the CEOs of the affected banks asking for assurances that they will be ready to launch PayTo no later than April next year.
“To realize the full potential of PayTo, we also expect banks to make the service available to all of their customers,” Mr Connolly added.
As part of the current NPP roadmap, Mr. Connolly also highlighted the benefits of the new International Payments Business Service which will allow the Australian dollar portion of inbound cross-border payments to be processed by the NPP.
“In particular, additional sender data will be provided with the payment, making it easier for payment service providers to meet their financial crime compliance obligations. This service will result in safer and faster cross-border payments,” he said.
Mr Connolly noted that the RBA expects the industry to remain committed to providing the commercial international payments service next year.
A total of 107 financial institutions currently offer NPP payment services for nearly 90 million customer accounts, and NPP has processed more than 1 billion transactions worth more than $1 trillion in the past year. past year.
