IS CASH DEAD FOR GOOD?
DEC 3, 2014: According to Finsia “competition from new technology and growing customer demands have seen 12 financial services organisations team up to back a world-leading, real-time payments solution for Australia.
The New Payments Platform (NPP) marked a milestone on December 2, 2014 when the Society for Worldwide Interbank Financial Telecommunication (SWIFT) was unveiled as NPP Australia’s chosen platform builder and operator.
Attending a press conference to mark the event, the global payments provider’s CEO, Gottfried Leibbrandt, signed a hefty contract to formalise its 12-year commitment to NPP Australia — whose founding members are:
- Australia and New Zealand Banking Group (ANZ)
- Australian Settlements
- Bendigo and Adelaide Bank
- Citigroup
- Commonwealth Bank of Australia
- Cuscal
- Indue
- ING Bank (Australia)
- Macquarie Bank
- National Australia Bank
- Reserve Bank of Australia
- Westpac
Billed as a new national infrastructure for fast, flexible, data-rich payments in Australia (or the “financial plumbing for the economy of the future”, as NPP Steering Committee Chair, Paul Lahiff, described it), one of the key advantages of the NPP will be the ability for account holders to send and receive funds in real time.”
The article continues:
“…demand is seeing non-financial institutions seek to break into the payments space, with Apple heading the queue.
“A lot of people have looked at the announcement of Apple Pay in the US and wondered what the implications are for Australia,” said Chronican. “And the message I keep sending to our people in the industry, and within ANZ, is the best way of protecting yourself from competition is by meeting your customers’ needs first.
Describing the NPP as a critical step in allowing the Australian banking industry to meet these customer needs in the digital age, he said that enabling simple peer-to-peer payments will just be the first step. Chronican believes that being able to attach information to payments, for example, will help to solve business problems.
“It is a major step forward today, and it shouldn’t be underestimated,” he said. “The introduction of a new payments system, or payments stream, is genuinely a once in a generation occurrence — comparable to the introduction of EFTPOS back in the 1980s or of the real time gross settlement for wholesale payments in the late 90s.”
Praising the collaborative approach that the NPP’s backers have engaged in, despite being fierce competitors, he said that their focus is now turning to execution in order to maximise the investment that’s been made in the NPP and deliver its benefits to customers.
From a financial institution perspective, he explained that one of the challenges involved in delivering these benefits is not only preparing their systems to offer real time payments, but also preparing a means of letting them know instantly when payments have been received.
“It’s only of value if you know that the money is there and available to you.” he said.
“Australian Payments Clearing Association CEO, Chris Hamilton, explained that the NPP is scheduled to be available during the second half of 2017, and that the total cost to the industry of the 12-year project was expected to top $1 billion.”
You can read the full article here
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
stephen mcmahon
:
And what about the Black Econimic.
Aaron Somner
:
Perhaps this is another step towards a cashless society and is probably a move towards a more efficient financial system. However a world without cash is not very benificial for the individual who is faced with a government with their hand out looking for every dime. Makes tracking every dollar easier for a government who can be very creative in inventing new taxes.