From October 2017 Goodbye BSB-Account and hello PayID
The Reserve Bank of Australia and big players in the industry has been busily working together for years on the billion-dollar ‘New Payment Platform’ or ‘NPP’ which now will be known as PayID with a launch date of October 1, 2017.
There will be no compulsion to adopt the new system, however there will be a grace period before the old BSB-Account system will be retired and this will be announced in due course
From October this year, bank customers will be able to replace their clunky BSB and account number with an email address or mobile phone number.
There’s plenty of complicated stuff happening behind the scenes, but one of the main things Australians should know is that, from October, they’ll be able to pick a PayID for each bank account they want to receive super-fast payments into.
The new system will be so fast and simple, it has been speculated that credit cards and cash will lose popularity.
It was built by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which also built Australia’s current payment system in 1998.
It will allow real-time processing for all ‘push’ payments (such as wages, welfare payments, bill payments or transfers to friends and family), but won’t speed up ‘pull’ payments made on debit and credit cards.
And services that use PayID may display a PayID name before you send a payment as an additional level of confirmation that you are sending money to the right person.
So with PayID, if you get the mobile number wrong, it will ask you if you want to pay ‘Joe Bloggs’ instead of 'Linda Blogs' and you will quickly realise the mistake and correct it otherwise the transaction won’t proceed.
Businesses also won’t have to “splash” their bank details all over the internet, where fraudsters lurk
Some of the key points to keep in mind up until October 2017 is:
- You can’t pick a random number. Banks will probably require a mobile phone number, email address, Australian Business Number (ABN) or Australian Company Number (ACN)
- You can set multiple ‘PayIDs’ for the one bank account. For example, your mobile phone number and email could both be linked to the same transactions account
- However, you can’t link the same PayID to multiple accounts
- Every PayID will be changeable. So if you get a new phone number, you’ll be able to ask your bank to change your PayID to the new number
- If you switch to a new bank, you will have to reuse an old PayID. But any direct debits you’ve set up won’t automatically transfer across, these will have to be re created in the new account at the new bank
- Some institutions may restrict PayIDs to specific account types. So you might be able to link to a debit card account, but not a mortgage offset or term deposit
- Your institution may not offer PayID straight away in October