The New Payments Platform (NPP) will be the "next major innovation" in the superannuation industry, according to wealth management and superannuation specialist IQ Group.
Set to be operational by 2017, the NPP is a system that enables funds, members, and employers to make real-time payments. The system will replace the overnight or multi-day processing of payments and settlements in place currently with the new infrastructure providing "access 24/7".
According to Ron Mullins, director of the Business Development Network for IQ Group, due to the growing prominence of social media and digital technology in financial services, superannuation customers expect "straight through processing outcomes" that lead to real-time services and interactions.
"The impact on the entire financial services industry will take some time to realise, but the NPP will drive the market forces to produce innovation that is in the public interest — across banking, superannuation, wealth management and beyond," Mullins said.
"Australia will become the fifth country in the Asia Pacific region to adopt such a platform, and the 12th global country overall since 2001 that has introduced a real-time payment system."
Mandated by the Reserve Bank of Australia, the NPP will require all Authorised Deposit Taking Institutions (ADIs) — including banks, credit unions and building societies — to be connected in a standardised way to ensure funds are accessible immediately.
Clients using the NPP will be able to initiate payments using mobile phone numbers, email addresses or Australian business numbers — rather than the traditional BSB and account number.
According to IQ Group, another key benefit for consumers is that funds will be accessible "almost as soon as [the] payment is received" even when the payer and payee have accounts at different financial institutions.
With superannuation funds and employers now operating within SuperStream guidelines, Mullins said the NPP will be the "next major technology-driven initiative" in financial services and will help to streamline greater efficiency in processing payments.