Understanding the Australian Payments Ecosystem

Monoova Published: 29 April 2025

In 2024, over 3.5 billion financial transactions occurred in Australia. That’s everything from a consumer buying their morning coffee to employers processing millions of payroll payments every month. The underlying systems that make banking possible have had decades of investment and technology development to create the systems we use today; online banking for both consumers and businesses, and bulk payments systems for businesses. However, there are major changes happening to the Australian systems. Our payment rails, that is the system that facilitates the transfer of funds, are evolving. The rail called BECS (the Bulk Electronic Clearing System) is proposed to be retired in 2030, and a new system, called the NPP (New Payments Platform) has emerged as its replacement.

What is BECS and why is it being retired?

BECS is the system for clearing bulk payments used by businesses who are processing high volumes of payments. A practical example of this is an employer submitting payroll payments via direct entry, or a subscription style business using direct debit to receive customer payments. The most noticeable limitation of BECS is the speed at which it processes, clears, and settles payments. After submitting a payment, it can take up to three business days to clear and settle. This length of time, coupled with the inability to process on weekends and public holidays, makes the BECS system outdated and inefficient.

What is the NPP and how will it change payments?

The New Payments Platform is a modernised payment infrastructure that enables real- time payments, greater visibility over transactions, and API connectivity. Developed by Australian Payments Plus (or AP+), an organisation made up of three domestic payments providers (BPAY Group, eftpos, and NPP Australia), collaborating to improve payment technology, the NPP is designed with consumer benefits in mind. The NPP payment rails are digital-first and API-enabled, which allows direct connectivity to other systems and technology, allowing for automation of processes such as reconciliation and scheduling via API.

Payments made via NPP rails are transacted almost instantly, and aren’t restricted to business hours. This means payments can be processed at any time, 24 hours a day, 7 days a week, 365 days a year.

What payments are on NPP payment rails?

Currently, the NPP offers payments in the form of:

• Osko, a one-off payment
• PayTo, for one-off and recurring payments
• International Payments System (IPS) for international payments

NPP also created PayID, which is not a payment rail but an alternative to entering a BSB and account number to reduce typos and make entering payment details easier.

What does this mean for Businesses?

For finance teams that are processing payments, instant transactions are a game changer. These teams can more accurately budget, report, audit, and forecast cashflow. Manually processing payments, reconciling, and disputing payments is greatly reduced, and creates additional capacity within these teams for more strategic work.

For technology businesses that process payments, they’ll need to adopt these new payment services before BECS is retired, and much sooner in order to remain competitive. They’ll be able to innovate how they manage their payments in new ways and deliver outstanding payment experiences to their customers.

The NPP is built with the consumer in mind, so regardless of who you are, you can expect your own payment experiences to evolve and improve over the next few years!

For businesses, it’s imperative to review your payments ecosystem before BECS is retired and you’re caught off guard without a way to transact. Re-establishing your payments ecosystem includes educating your customers, preparing your systems, and transitioning over, which can take longer than you think so it’s best to get a head start!