How a more open payments ecosystem is giving consumers more control

- By Collaborative Media & Publishing
The traditionally opaque world of payments is opening up – and consumers are set to reap the benefits through greater access to their data and a more integrated ecosystem.

The telco sector is just the latest to be included in the Consumer Data Right (CDR), which gives people the right to share their data between any service provider to easily find the best deal.

"It's absolutely amazing what could happen in the next few short years," says payment company Paypa Plane CEO Simone Joyce, who is also the chairperson of Fintech Australia.

"There will be much less pain from the smallest things like going to the gym and not having to spend 10 minutes filling out documents with personal financial details, all the way through to applying for a mortgage,” she adds.

APIs drive greater connectivity and access to payment services

APIs (application programming interfaces) are making it easier for businesses and platforms to connect disparate payment systems. Without them, open banking would be an unworkable concept, given how quickly and reliably providers need to retrieve data from dozens of organisations.

Data from open banking provider Frollo found that 98.9% of API calls were successful and data returned in 0.84 seconds on average across its open banking platform in the third quarter of 2021.

BPAY has launched a suite of APIs to bring its bill payment service to more than 90 companies over the last few years.

They have made it far easier to implement the service while also streamlining common activities such as validating a BPAY payment or retrieving BPAY biller details.

Companies as varied as small FinTechs, such as DiviPay, to established lenders, such as Virgin Money, have already relied on the APIs to power their BPAY service.

New licensing framework to improve access

New payment companies are increasingly bringing new innovative services to the market but gaining access to the underlying payment systems, and navigating multiple licensing schemes overseen by different regulators, is not always easy.

For example, some payment providers need an Australian Financial Services License (AFSL), yet only about three-quarters (76%) of AFSL applications were finalised within 150 days in 2019-20, according to ASIC.

A recent Treasury Review recommended a single licensing framework, which includes tiered authorisations (and links to other frameworks such as CDR). In December last year, the government agreed to the recommendation and work is now underway towards a more unified approach.

"It's a really sensible progression of the licensing regime," Joyce says. "It means that at that payment initiator space it allows scope for a lot more companies to participate in the payment ecosystem, without necessarily needing to go and get a full banking license."

New services in the pipeline

Meanwhile, BPAY Group is exploring a payment with document service, which would increase the capability of its Osko fast payments service.

"This service, and particularly the ability to include a link to a document with a payment, would promote innovation and reduce costs," RBA Governor Philip Lowe said recently. "This service will aid reconciliation for recipients and payers will find they need to devote fewer resources to managing customer queries."

BPAY Group, NPP Australia and eftpos recently merged to form Australian Payments Plus.

Published by BPAY Pty Ltd (ABN 69 079 137 518) email: The BPAY Scheme is managed by BPAY Pty Limited.  When you use BPAY payment products, the BPAY Scheme is paid fees relating to processing costs and BPAY Scheme membership.  Contact your financial institution to see if it offers BPAY payment products and to get the Product Disclosure Statement.  Any financial product advice provided by BPAY Pty Limited in relation to BPAY payment products is general advice only and has been prepared without taking into account your objectives, financial situation or needs.  Before acting on such advice, you should review the Product Disclosure.

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