Banks join direct payments

Instant Payments are already popular in e-commerce and retail. Photo: Alex Brylov via Bigstock

Customers of some banks will soon be able to transfer cash to employees and friends of other institutions.

A new $1 billion payment system used by three of the four major banks will allow customers to transfer money between rival banks in near real time.

This new payment system that will enable near instant money transfer will eventually align the financial services industry with other major industries such as e-commerce and retail in the instant transfer of money.

Di Chanellor, General Manager of Westpac, said the system will “give consumers a new level of personalization and innovation” before going on to say that the current delays between payments “could be a real pain point for customers”.

National Australia Bank, Westpac and Commonwealth Bank have all started limited use of the platform, while ANZ has said they are waiting while they continue testing the new payment system.

ANZ’s reluctance to release the new service to its customers is an interesting appeal, as it played a part in the development of the software and the three main competitors are all willing to start using the program immediately.

The banks have only opened use of the service to a small selection of customers who initially said “the security of our customer data is paramount” and they want to ensure customers have a safe experience when suing the service.

However, those who do have early access to the new platform will be happy with instant transfers already available to them.

The introduction and use of the new payment system comes after six years of development by the government and the RBA, along with the help of 13 other financial institutions, including the work of the four major banks.

The chief executive of the so-called New Payments Platform, Adrian Lovney, said the development momentum behind the project came from the increasing use of mobile phones and other digital technologies.

With people demanding immediate service and constantly exchanging money in the modern world, a platform like this has been around for a long time.

BPAY’s John Banfield said that when services and products become available on the platform, users will be able to transfer money instantly via their phone.

ANZ is expected to release the platform to its customers in the coming months.

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