The Australian banking industry is undergoing a significant payment transformation driven by technological advancements and changing consumer preferences.
Card payments have long dominated the landscape. But the rise of alternative payment models and the introduction of innovative solutions like the New Payments Platform (NPP) has sparked a wave of innovation.
As Australian banks seek to move away from legacy technology, they are actively exploring newer, flexible, and safer payment systems to cater to the rising demands of a digital future.
Cards at the top
In Australia, card payments are the preferred transaction method for consumers, with three-quarters of payments made using card networks.
According to Ellis Connolly, Head of Payments Policy at the Reserve Bank of Australia, Australians make card payments more frequently than in many comparable countries. This includes nations traditionally thought of as low-cash, like Sweden.
The NPP
The New Payments Platform (NPP), introduced in 2018, has catalysed a change in the Australian payments landscape.
Developed via industry collaboration, the NPP creates payment messages carrying richer remittance information. It also supports the development of overlay services. As of October 2022, there were almost 13 million individual IDs on the NPP.
The NPP reduces transaction times from up to three working days down to less than one minute. It also allows descriptions of up to 280 characters, compared to the 18 restricted by traditional bank transfers.
Accompanying the NPP is PayTo, a service that allows for withdrawals using an overlay service combining payment orders and authorisation requests. It is seen as an alternative to Visa and Mastercard debit networks.
Australians have taken to the new system. National Australia Bank (NAB) has witnessed a 40% increase in NPP digital business transactions and a 120% increase in transaction value over the past year.
107 financial institutions offer NPP payment services for almost 90 million customer accounts. While most are banks, several non-bank institutions use the NPP to provide their customers with faster payments and innovative services.
Effective cloud migration needed
Yet adopting the NPP and PayTo hasn’t been smooth sailing for Australian banks. In early 2022 a handful of significant institutions declared they would miss the Reserve Bank’s deadline for adoption. Among the causes of the delay was the dragging migration of key payment technologies.
The adoption of cloud services is gaining momentum in the banking industry, with many institutions already running cloud workloads in production. Institutions are now looking at moving their core workloads. Yet ensuring that cloud migration is effective remains an altogether different challenge.
Banks must prioritise security, reliability, and compliance when selecting a cloud partner for card processing systems. Working with a trusted cloud provider that offers robust security measures, compliance certifications, and industry-leading data protection protocols is essential.
Seamless integration with existing systems, scalability to accommodate growing transaction volumes, and advanced analytics capabilities are vital factors to consider when evaluating potential cloud banking partners.
Pismo’s migration toolkit
Pismo has extensive experience modernising legacy infrastructure and migrating accounts between systems. API-based and designed around microservices, our platform was born on the cloud.
Our teams have securely migrated over three million accounts in 2023 alone, working with clients ranging from new fintechs to Fortune 50 banks. Our migration process gives clients complete visibility in real-time of all steps undertaken.
This visibility includes real-time information on cards, accounts and transactions occurring during and after the migration. Clients can take full control of their modernisation, understanding every step made.
Enable effortless systems modernisation at scale and speed: Read about Pismo’s methodology here
