Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Non-bank lender says NPP will be ‘transformative’ for SMEs

businessman racing businessman racing sme logo
Staff reporter 4 minute read

The introduction of the New Payments Platform could transform the way SMEs conduct business in a number of key areas, according to the MD of a non-bank lender.

The NPP, a joint initiative between 13 financial institutions including the big four banks and the RBA, has been called a “new set of rails” for the Australian payments system.

It has been designed to enable the instant, cross-institutional transfer of funds.

Speaking of the roll-out, Greg Charlwood, managing director of Australian Invoice Finance, said that the greater velocity of payments could allow for “simpler and more reliable” cash flow management and reporting for SMEs and enable overnight payments to be released into the economy.

Advertisement
Advertisement

NPP Australia, the organisation established to oversee the development and operation of the platform, has said that within a year of the launch of the NPP, businesses will also be able to send payment requests to customers with payment information included.

Mr Charlwood welcomed the arrival of NPP, saying that he believed it would “help small businesses to be paid faster and therefore better manage cash flow”.

The platform will also help small businesses by offering more room to outline what payments are. Instead of just 18 characters, NPP will allow for a 280-character transaction description.

Mr Charlwood noted that there was also the potential to add information to transactions to enable compatibility with accounting systems such as MYOB.

“Payments could be automatically matched to invoices, for example,” the MD said.

“The consolidation of [user] information into one ID is sure to reduce accounting errors, further increasing the efficiency of the system.

PROMOTED CONTENT


“The PayID will also allow businesses to change banks without having to notify suppliers or customers of new account numbers. The account number can simply be changed on the PayID without the counterparties even needing to know that the change has occurred.”

However, Mr Charlwood echoed some concerns that the reduced transaction time could lead to more fraudulent banking activity, as experienced in the UK and Singapore after the launch of their real-time payments platforms.

“Under the NPP, financial institutions will no longer have one or two days to detect and stop fraudulent transactions as they currently do. Real-time transfers of funds mean they will need to become more vigilant around the prevention of fraud rather than reacting to fraudulent transactions,” Mr Charlwood said.

[Related:  ‘Insufficient attention’ being paid to improving SME loan risks]

Non-bank lender says NPP will be ‘transformative’ for SMEs
businessman racing
TheAdviser logo
businessman racing

 

more from the adviser
team expansion ta Bank eyes broker channel as it revamps

A non-major bank has undergone a digital overhaul as it prepares ...

remuneration money MYOB partners with cash flow funder

The accounting software platform has partnered with a cash flow f...

stamp duty money house NSW government pushed for details on proposed property tax

The NSW government’s plan to replace stamp duty with an annual...

FROM THE WEB