From next month, Australians will be able to transfer money from one person to another in near real-time, using an email address or phone number, rather than the traditional BSB or account number process.
Financial institutions in Australia have already begun sending payments across the New Payments Platform (NPP), testing the technology before its public launch in February.
"The platform is already live, and employees at some of the participating banks, building societies, and credit unions are already sending payments to each other via the platform," a spokesperson for New Payments Platform Australia Limited told ZDNet.
"Once the platform launches, the participating banks, building societies, and credit unions will commence rolling out their NPP-enabled services to their customers."
NPP Australia, the company charged with the oversight of all of the transactions moving through the system, will have a single source of revenue, the Reserve Bank of Australia (RBA) explained in October, which will be a small fee for a transaction performed on the platform.
The RBA, in consultation with the country's banking industry, has built the underlying settlements architecture that will allow the payments to occur.
While the RBA has been building out the new platform for quite some time, the details have been lacking, despite the bank touting it as a significant project for the payments industry.
With the new platform comes the ability to include much more data with the payment; up to 280 characters of information, as opposed to the 18 currently allowed by banks. The extra space is expected to allow for the adding of data such as goods and services tax (GST) information, hyperlinks to documents, or a field that triggers an overlay.
"Richer data will facilitate e-invoicing and straight-through processing, and is likely to offer enhanced functionality to government agencies," Dr Anthony Richards, head of the RBA's Payments Policy Department, and David Emery, a senior manager within the same department, told the House of Representatives Standing Committee on Tax and Revenue in October.
While NPP Australia is encouraging the development of overlays, including from fintechs, the RBA's representatives said many people won't need to become an overlay service as they will be able to take advantage of description field.
"Whatever extra data you want to include in the message will make it through to the recipient, and that will be able to call forth all different types of business flows," the bank said.
There are 13 participants in the NPP, including three entities that are service providers for smaller institutions. The RBA said this means that when it goes live, there will be something like 50 smaller institutions ready from day one.
Although instantaneous payments has been touted as great for consumers, Nick Savvides, Symantec CTO for Australia, New Zealand, and Japan, told ZDNet it is an even greater opportunity for attackers as they will have the ability to move money quickly.
Currently, when money is transferred it gets lodged in batches that go through a clearing house, with the big four banks in Australia running their own batch clearing practice; there is also a collection of second-tier clearing houses that perform transaction clearing. These transactions are held for a number of hours to allow batch analytics to be run thoroughly and for time to isolate dodgy transactions.
Under the NPP, banks will have 30 seconds to clear the settlement and forward the funds.
"So now, all of that infrastructure that is built to do batch analytics doesn't exist anymore and they need to work in real-time, which means we now have to trust the authentication method," Savvides explained last month.
"One of the things I personally have been working on over the past two years is helping our customers move to stronger mobile apps to be able to facilitate NPP while reducing that risk because they know they can no longer do that batch analytics."
Robert Schwarz, Australia and New Zealand managing director for speech software firm Nuance, told ZDNet previously there is an important place for voice biometrics to curb the influx of fraud that could emerge in an instant payments environment.
"Stopping fraud and unauthorised transactions upfront is going to be really important to banks," Schwarz said last year. "Implementing voice biometrics is a much more secure method of identifying and authenticating the user or the account owner, and is certainly going to help mitigating more of that fraud as these new systems come in."
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