Osko fast bank transfers bring relief to those in need

- By Collaborative Media & Publishing
Payment service Osko is enabling millions of Australians battling natural disasters to receive government payments in minutes rather than days.

It has served as a lifeline for consumers and businesses who needed immediate funds to get through the 2019-20 summer bushfires and, more recently, pandemic-related lockdowns.

"In the past, bank transfers could take a few days to get through and only Monday to Friday," BPAY Group Chief Customer Officer Keith Brown says. "Now when the government department says 'we've paid you', you can go and look at your account and it's possibly already there.

“People will know if they received their money in under a minute if they see Osko in their digital banking transaction records,” adds Brown.

Services Australia, in collaboration with its banker the Reserve Bank of Australia, was the first government department to integrate Osko into its back-office systems, enabling $233 million to be sent in under a minute to those affected by the 2019-20 summer bushfires[1]. Since mid-August, almost 700,000 COVID-19 disaster payments have been processed each and every Sunday.

"That wouldn't have been possible before Osko – the payment would have to be made on a business day," Brown says.

More government payments set to become real-time

The Reserve Bank of Australia[2] has also worked with the Department of Finance to incorporate Osko into its systems, allowing it to quickly fund government agencies at short notice in response to emergencies such as floods or bushfires or to buy medical supplies during the pandemic.

Other government agencies beyond Services Australia are also now expected to adopt fast payments. It could further accelerate the shift to fast payments given the vital role governments play administering tax and welfare systems, paying public servants, and a wide range of procuring goods and services.

"The future vision for government payments is to utilise the NPP and deliver more payments in real time and irrespective of the day and time; whether they are for stimulus or emergency programs, or for regular payments," the RBA said in its June 2021 bulletin.

However, it will require significant commitment to overcome legislative requirements and current strategies and budgets directed at custom payments solutions, according to Treasury's recent Review of the Australian Payments System[3].

"The Review recognises the barriers faced by government agencies but notes that planning with their banking partners through the development of a priority list of programs to move to the NPP will provide for a smooth transition over time," Treasury said.

"Changes in the way that governments pay for goods and services can create network effects and drive change in the payments ecosystem, because of the scale and number of services that the government provides."

Nonetheless, Australia remains at the forefront of fast payments.

The pandemic has prompted other countries to accelerate their own rollouts. In the US, the Treasury Department recently faced major issues such as verifying the identity of recipients who were sent stimulus payments via cheque or through direct deposits (ACH)[4].

Benefits extend beyond fast payments

Osko, the first overlay service on the New Payments Platform (NPP), is now integrated across 87 financial institutions which process an average of 2 million payments each day[5].

It was built by Australia's banks in one of the nation's largest industry-wide collaborations to support the community and economy. It is another sign of the sector's long-term commitment to the community, with banks recently supporting more than 57,000 customers with hardship assistance during recent lockdowns[6].

But while getting money out quickly to those in need has attracted much attention, the benefits of Australia's new payments system extend beyond speed. Osko payments carry more detailed data about the payment, allowing for greater engagement with individuals. Osko users can include up to 280 characters of text or emojis to describe the payment. 

"We have a range of service levels around those transactions, so they have to be processed within a certain period of time and the institutions have to meet certain obligations,” Brown said.

People can see whether Osko was used to complete their transfer because it is clearly labelled in transaction statements and online banking systems, no matter what institution they bank with.

Around one-third of all Australian adults say they are now using Osko while almost two-thirds say they are aware of Osko[7].

Osko payments also enable the use of PayID – a simpler way to address a payment by using a mobile number, email or ABN, instead of a BSB/Account Number. Around 16% of Australian adults now say they are using PayID while 56% are aware of the brand[8].
[1] Delivering payments faster - Services Australia. (2021, September 15). Retrieved from https://www.servicesaustralia.gov.au/organisations/about-us/everyday-progress/being-transparent/delivering-payments-faster
[2] COVID-19 Stimulus Payments and the Reserve Bank's Transactional Banking Services | Bulletin – June Quarter 2021. (2021). Reserve Bank of Australia. Retrieved from https://www.rba.gov.au/publications/bulletin/2021/jun/covid-19-stimulus-payments-and-the-reserve-banks-transactional-banking-services.html
[3] Review of the Australian Payments System – Final report | Treasury.gov.au. (2021, September 15). Retrieved from https://treasury.gov.au/publication/p2021-198587
[5] BPAY Group. Based on the daily average for June 2021.
[6] Hardship assistance triples as deferrals continue to rise. (2021, September 14). Retrieved from https://www.ausbanking.org.au/hardship-assistance-triples-as-deferrals-continue-to-rise
[7] Kantar BPAY Brand Health Review (August 2021).
[8] Kantar BPAY Brand Health Review (August 2021).

Published by BPAY Pty Ltd (ABN 69 079 137 518) email: marketing@bpay.com.au. 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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