Reserve Bank boss tells Aussies to hurry and register for new payment system.
The nation’s top banker is urging Australians to pay bills using a technology that has been shown to leave individuals open to cyber theft overseas.
Speaking in Perth on Tuesday, Philip Lowe, the Reserve Bank of Australia (RBA) governor sang the praises of the ‘PayID’ system, which facilitates the instant transfer of funds between accounts.
“(The RBA) operates a key part of the infrastructure supporting Australia's new payments system, generally referred to as ‘the NPP’ (new payments platform). This system allows you to move money between bank accounts in real time on a 24/7 basis using an easily remembered PayID, such as a mobile number, to address the payment,” Dr Lowe explained.
“BSBs and account numbers can still be used, but if you have not already done so, I encourage you to contact your bank to register a PayID, which makes it easier to use the new system.”
But writing in The Conversation, Swinburne University of Technology adjunct professor Steve Worthington used lessons from a similar platform – Faster Payments – that has been used in the United Kingdom for a decade and which is riddled with fraud risk.
“Part of the problem in the UK is that banks have trouble identifying potentially fraudulent transactions,” Professor Worthington said.
According to the managing director of the UK Payment Systems Regulator, Hannah Nixon: “There is no silver bullet for [authorised push payment] scams and some people will still, unfortunately, lose out.”
She added that account holders needed to take “an appropriate level of care” in protecting themselves.
Last month, Dr Lowe said in a statement to the House of Representatives Standing Committee on Economics that just 1.8 million Australians, or 7.2 per cent of the population, had registered a PayID.
He said the take-up of the system had been slower than expected and blamed the major banks for dragging their feet, compared with smaller financial institutions who had embraced the system more readily.
“Despite the relatively slow start, we still expect that the new system will provide the bedrock upon which further innovation in Australia’s payment system will be built.
“The Payments System Board is keeping a close eye on access arrangements so that those with new ideas and better ways of doing things can use the new system,” he said.
FinExtra reported this week that the NPP system was expecting a surge in transactions as the country's Big Four banks rolled out Osko, an overlay service enabling account-to-account real-time payments via e-mail and mobile phone numbers.
According to MoneySmart, the new system allows users to:
- transfer money instantly between accounts at different financial institutions
- have the transferred funds available in the payee's account within seconds
- make payments any time of day, 365 days a year
- include more detail about your payment, like additional text, invoices and receipts.
Users need to register with their banks to take part in the NPP. Once they have chosen an easy-to-remember ID, they no longer need to use BSB and account numbers to make electronic payments.
The system, which can operate from a smart phone app, was introduced in February this year by 60 Australian financial institutions.
“If you notice that your PayID has been used without your permission, or that there's an error on a PayID transaction, you should report it to your bank,” according to MoneySmart. “If your bank subscribes to the ePayments Code, the same processes apply to getting your money back with a PayID transaction as a normal transaction.”
Would you feel safe using the new PayID system to transfer money out of your account? Is there any pressing need for payments to be made instantaneously?