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, according to experts.
This ‘PayID’ will be a crucial part of Australia’s new payments system, which will allow almost instant bank transfers, 24 hours a day, 365 days a year.
The Reserve Bank and big players in the industry has been busily working together for years on the billion-dollar ‘New Payment Platform’ or ‘NPP’.
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.
NPP Australia CEO Adrian Lovney told The New Daily that the PayID concept will make account numbers easier to remember, and remove the risk of accidentally sending money to the wrong person.
“It makes payments more intuitive and simpler because users will be able to provide payers details which are easy to remember such as an email address or phone number,” Mr Lovney said.
“This offers greater peace of mind as people no longer have to rely on providing financial account information, such as a BSB and account number, to payers so they can receive payments.
“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, if a family member wants to send you money or you’re splitting the bill at a restaurant with friends, you can simply tell them to type your PayID into their online banking and, in about 15 seconds, the money will be in your account.
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.
Payments expert Nathan Churchward, whose employer Cuscal is one of the 13 companies working on the new system, predicted that PayID could become as popular a brand name to Australians as Google and Uber.
He gave a real-world example: he recently bought $2500 worth of tickets for a group of friends and accidentally gave them all his wrong bank account number. Their payments bounced back and he was left wondering why no one was paying up.
“I work in banking. You’d think I’d be able to remember my account and BSB. But I can’t!” Mr Churchward told The New Daily.
“With PayID, if you get the mobile number wrong, it will ask you if you want to pay ‘Joe Bloggs’ and you’ll realise and won’t proceed.”
Businesses also won’t have to “splash” their bank details all over the internet, where fraudsters lurk, he said.
Cuscal’s hot tips on PayID
- 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’ll be to reuse an old PayID. But any direct debits you’ve set up won’t automatically transfer across
- 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