Australia’s $1 billion banking overhaul hits delays

RBA floor

A $1 billion real-time payments network that will be backed by the Reserve Bank of Australia has been delayed until 2017, after five major stakeholders pulled back from the scheme.

The electronic New Payments Platform (NPP), which will be created by SWIFT and the payments provider Fiserv, has been dogged by delays – despite having the support of Australia’s four biggest banks, the National Australia Bank, the Commonwealth Bank, Westpac and ANZ, as well as Citigroup, ING and several others.

Five of the financial groups that were initially involved in the planning (HSBC, Paypal, Suncorp, Bank of Queensland and Bank of America Merill Lynch) have now said that they will not sign up to fund the project at this time. These organisations may decide to re-enter the project at a later date, reducing the financial burden on the 12 that are already involved. In the meantime, however, failure to secure a commitment from all 17 firms has pushed back the NPP’s completion date for a further year.

The hold-up has also been attributed to individual banks lagging behind with their own technical overhauls. Once complete, every Australian organisation with a banking licence will be expected to connect to the NPP system, either directly or via another bank, which will not be possible until banks complete internal upgrades.

Nevertheless, those leading the NPP drive remain positive.

We have reached a defining moment for the future of Australian payments,” said NPP steering committee chairman Paul Lahiff.

The industry’s vision in response to the Reserve Bank’s challenge for faster, richer 24×7 payments is now well on the way to becoming a reality.”

 

560 views

Related reading

Bitcoin regulation to be discussed with Bank of Russia
fintech podcast
nordea fintech accelerator
fintech