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NPP The Australian Experience
Susan BrayExecutive General Counsel, Australian Payments Clearing Association Limited
Disclaimer 2
Please note that any views expressed in this presentation are the personal views of the speaker and do not necessarily represent the views of the Board of NPP Australia Limited, Australian Payments Clearing Association Limited or individual payment system participants.
Why are we doing this? Pressures: regulatory demands
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“….market forces might not be sufficient to produce some types of innovation that are in the public interest…[and] innovation is important to [the Board’s regulatory] mandate”
Payments System Board, Reserve Bank of Australia, June 2012
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Real Time Payments Committee, 2012
In Australia we did some serious thinking….Two key assumptions arise: • There will be a wide diversity of user
need for real-time payments… the needs of particular communities, and particular contexts, are becoming more bespoke and tailored …automated and remote.”
• Payment systems, schemes and services will themselves become more diverse and more competitive over time. …payment systems and schemes are becoming more commercial and competitively oriented.
5The Australian Model:the New Payments
Platform
Elements of basic infrastructure 6
Ubiquitous open networkISO20022 global standardFast ADI to ADI turnaroundNew platform, not a replacementReal-time value delivery through RBASimple Addressing
Overlay services – key concepts 7
Using the infrastructure, but commercially runVaried and potentially competitivePayment providers must belong to infrastructure, but can choose which overlays to useExtra “tailored” data – to link payment with transactionConditionality
Why do it this way? 8
Versatility– Providers need to serve all, any time: p2p, b2b,
g2g…Speed– In the era of the cloud, customer expectations are
for real-time service.This must be built in.
Data - richness– As economic activity goes fully digital, the payment
must be embedded in the transaction.
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Who gets to play?“Participants” have equity in NPPA; they clear payments and/or process value“Identified” ADIs control accounts“Connected” institutions sign and send messages A “Settlement only Participant” uses another ADI to clear
ParticipatingADIs
All End UsersSettlem
ent only Participant
Conn
ecte
d
Identified ADIs
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Case Study – New Payments Platform AustraliaHow it works
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Payer / Ordering Customer
SWIFTPaymentGatewayBank
Channels
SWIFT Payment Gateway
Fast Settlement Service
Addressing Database
$24h
Overlay Services
Payee / Beneficiary Customer
SWIFTPaymentGateway Bank
Channels
Ordering CustomerBank
Beneficiary Customer Bank
RTGSCentral Bank
Settlement
Clearing
Settlement1
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Clearing happens directly between debtor and creditor banks
Successful clearing triggers immediate settlement in RBA’s central settlement engine
First Overlay: the Initial convenience service
• Mass-market, convenience
• Intended to prove concept and encourage use
• FIs to promote to their customers
• BPAY recently announced as ICS provider
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Account-to-Account GapMobile convenience service
Ubiquitous POSEmergency Payments
Direct to account ticketing / tolls
Workflow ManagersConditional Payments
Alternative Currency RedemptionProperty Transfer
Data Rich Use of ISO MessagesElectronic invoicing and remittances
Data rich payments
Participant servicesFraud monitoring
Batching
Possible Overlay Services
Potential new overlays 14
Things we learned 15
Determine which elements are collaborative and which are commercialAgree high level architecture early, but remain flexibleRobust governance processes – so decisions stickProgram management and implementation challengesClear statement of objective that guides all subsequent decisions
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NPP The Australian Experience
Susan BrayExecutive General Counsel, Australian Payments Clearing Association Limited