npp presentation - adrian lovney

Adrian LovneyCEO

Australia’s New Payments Platform –Industry Update

SWIFT Business Forum

8 June 2017

Australia’s New Payments Platform will be world class

© NPP Australia Limited

Required

Features

Highly desired features

enhancing customer

value and innovation

Faster Payment Innovation Index

Copyright: FIS

Interbank

Account to Account

<1min End-to-end

Irrevocable

Supports Retail

Optional features

maximising customer

value and innovation

Universal Access

ISO standards (20022 or 8583)

24x7

Extended B2B

remittance

Alternate Identifier

Batch & Individual

payments

Fast Settlement

More than Real-time Payments – Data capability


• Universal industry message

scheme:

− XML based

− Payment message standards

• Information rich capability

• Incorporation into business

processes

• Structured or unstructured

• Link to a document or url link

• Funds settled in real-time

Message foundation:

ISO 20022 Schema

Value

Information • Enables ease of back

office integration

• Promotes automation

and straight through

processing for business

transactions

Using the New Payments Platform


• Send or receive payments

using an existing/supported

NPP message

• Requires one point of access

via one NPP Participant

• Enables reach to customers of

all the other Participants

• Enables access to PayID

capability

Creating anOverlay Service


• Basic Infrastructure currently supports one payment

message - a basic single credit transfer

• More payment messages will be added over time

• A payment message with additional features or functionality

(e.g. SLA, a new data field or message type) is defined as

an Overlay Service

• Overlay Services are offered to Participants and their end

customers

Creating an Overlay Service


• Can cover a broad range of use cases

• Can range from simple (e.g. rules based) to complex (e.g. new message orchestration)

Customer P2P

applications

through to

Business,

Corporate &

Government

Cross-industry or

“horizontal”

overlays

e.g. e-invoicing

and remittances

Industry vertical

overlays

e.g. Securities,

Insurance and

Superannuation

Utility overlays

Delivering a specific

capability, e.g. KYC

and fraud

First Overlay - Osko


Confidence in Delivery Through your Financial

Institution

Quicker moving moneyMore ways to address a bank

accountEasier messaging

Money received in less

than 1 minute

No need to share account

details when using PayID

More explanation with up to

280 characters or a pdf

Customer can receive

immediate confirmationOsko will be in the majority of

Financial Institutions’ mobile &

Internet Banking platforms

Easily track and reconcile

which payment requests have

been paid in part or in full

PayID Name is displayed to

confirm the intended recipient

Simple requests with up to

280 characters using PayID

Ability to request to be paid

Confidence in who you’re

paying or sending a request to

Easy to track if requests have

been paid


Potential Use Cases for the New Payments Platform

• Micro-businesses

• SMEs for delivery of

products/ services

• E-commerce

P2P P2B

• Real time payments

using smart addressing

• Instant payment to cover

insured damages

• Superannuation

contributions

• Single touch payroll

B2P

P2G

• Payment of taxes

and fines

G2P

• Emergency

disaster payments

• Welfare benefits

B2B

• Transport with

delivery of goods

versus payment

• E-invoicing

Possible Overlay: ‘Request to Pay’ for capital raising


1.Paper form

− Print cost

− Lead time

− Postage

2.Manual data input

− Errors

− Illegibility

3.Payment via cheque

− Sorting from post

− Payment clearing

4.Matching cheque to

form

− Errors with matching

payment to form

TomorrowToday

1.Send link to application

form

− Hosted securely

2.Pre-populate form with

user data and payment

data

3.“Request to Pay” pushes a

prompt for payment

− Payment is real time

4.100% matching of payment

with form

Request to Pay

Make your cheque, money

order or bank draft

payable to

Application

Name: Adrian

Lovney

Address: 3 Spring

Street, Sydney

NSW 2000

HIN: 2000555888

Mobile: 0408

123456

Development of Overlay Services

NPPA’s role


• Provide information, e.g. connectivity and messaging standards, rules

and regulations

• Work with key stakeholders to help design Overlay Service and

requirements

• Collaborate around the core:

− Use of message fields and data to ensure interoperability and

certainty

− Development of standards for messages and/or data

• Identify if change is required and manage the change management

process

• Authorise overlay

NPPAL may play a central role in facilitating overlay services where a centrally coordinated approach would be beneficial


Example: Dividend Overlay Service

Institution’s Bank with

fully funded

Dividend Account

Paymen

t

Gatewa

y

(PAG)

Payment

Gateway

(PAG)

Overlay payment

initiation message

FI’s with Payee

Accounts

• Dividend data carried through payment message, e.g. dividend rate, amount,

franking credits, withholding tax etc.

• Could contain a url/document link for shareholder remittance

Clearing using

overlay defined

message

Payment

Gateway

(PAG)

Payee Customer Bank

Payment

Gateway

(PAG)

Payee Customer Bank

Payment

Gateway

(PAG)

Payee Customer Bank

NPPA’s role:

• Facilitate discussions with

key players

• Provide thought leadership

regarding options

• Develop potential message

structures and data fields

• Consider how central NPP

capabilities may add value,

i.e. PayID

Dividend

Overlay Service

Provider

Customer Touchpoint


• A core, customer facing component

• Enables payments to be made using an easy to

remember alias

− For consumers, this could mean providing their

mobile number to receive salary or wages

− For businesses, this could mean providing their ABN

to receive invoice payments

• An alias is linked to an underlying BSB/account number

• An alias can easily be moved between accounts

Customer Journey: Switching Financial Institutions


Eva has opened a

new account with FI

(B) and would like to

link her PayID to her

new account.

Eva logs into her

current FI (A) to set

her PayID status to

Portable.

FI (A) confirms Eva’s

identity and her

authority to operate

her PayID.

FI (A) submits a

request to switch the

PayID status to

portable.

Eva logs into FI

(B) to request

registration of her

PayID.

A B

Portable

Fast Payments – Enhancing the Speed and Availability of Retail Payments Bank for International SettlementsNovember 2016

• Social engineering scams or spoofing – manipulation of the payer or payee by a fraudster, resulting in the issuance of a payment instruction by the payer acting in good faith

• Account compromise - initiation of a payment instruction by a fraudster (who has fraudulently obtained the payer/payee’s sensitive payment data)

• Hacking - modification of an attribute (such as the account number, transaction amount, name of payee or payer) of a genuinely issued instruction intercepted by the fraudster

Real Time Fraud Risks


Fraud Controls

Any combination of:

• Protect the front door: biometric log-in, device fingerprinting

• Creation of new payee: enhanced verification including 2 factor authentication

• Outbound: real-time detections, pattern screening and quarantine for investigation

• Inbound: possibly some inbound screening

• Data analysis and sharing: blacklisted PayIDs and payee accounts

Industry Practice: tactics we expect to see Participants use


Media, Market and Fintech interest is growing


Myth Fact

Myth Busting - New Payments Platform


BPAY’s NPP offering is just faster

bill payments

NPP is for P2P payments only

If I’m not a bank, I have to be an

Overlay Service to use the NPP

NPP isn’t happening anytime soon.

I can afford to wait.

Osko by BPAY is a totally new service providing

fast P2P and Request to Pay payments

The platform can be used for a variety of use cases

and opportunities – from P2P to B2C and B2B

You can plug into the NPP in many ways: directly,

indirectly, as a connected institution, or as an

Overlay Service Provider

The New Payments Platform is on track to

launch in Q4 2017

SIBOS – Sydney 2018


Thank you

©2017 NPP Australia Limited (ABN 68 601 428 737)

Disclaimer: This presentation is for general information purposes only. Neither this presentation, nor any information contained in it, shall form the basis

of any contract between NPP Australia Limited and any person, nor constitute a commitment by NPP Australia Limited to any person.© NPP Australia Limited

For more information,

visit www.nppa.com.au

npp presentation - adrian lovney

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