Are you ready for the real-time payments revolution?
By adapting early to real-time payments, Australia’s largest corporations will stake a competitive advantage and enjoy the benefits of improved customer-centricity and operational efficiency.
Close to 100 per cent of Australian consumers are using real-time payments through the New Payments Platform (NPP), but the penetration among businesses still remains some way off ubiquity.
“If your end user is on the NPP and you’re not, you are losing that competitive differentiation and engagement with your customers,” says Kathryn Carpenter, Managing Director of Domestic Payments and Liquidity for Global Transaction Services at Westpac.
“That is a lost opportunity. If you’re a business-to-consumer (B2C) company and you’re not thinking about real-time, then you are behind.”
Consumers expectations are increasingly that payments are 24/7 real-time.
With the advent of the NPP in 2018, consumers are now commonly using the unique identification capabilities of PayID and using digital wallets on smart phones at point of sale.
Over 24 million PayIDs1 have been created and more than 100 payment providers offer services through the NPP, which now manages more than 35 per cent of all account-to-account transactions in Australia.
“For B2C businesses and government agencies, real-time payments are about meeting customers and stakeholders where they want to be met,” says Carpenter.
1Figure has been directly provided by Australian Payments Plus. https://www.auspayplus.com.au/
Drivers of change
Consumer adoption is one of three drivers for organisations to embrace the real-time revolution. Another is value, and the opportunity to generate operational efficiencies and insights, leaving behind the cost and risk of legacy and manual payments.
The third driver is industry, with the planned phase-out of the Bulk Electronic Clearing System (BECS, also known as direct entry) in 2030. In use since the 1970s the decommissioning of BECS, which has been endorsed by the Federal Government, marks one of the most significant transformations in payments in a generation.
The direct entry BECS infrastructure accounts for around AUD 15 trillion in payments each year, so it is still deeply embedded in Australia’s payments processes. Replacing this legacy infrastructure will usher in a new world of real-time payments that will revolutionise corporate treasury management and transaction banking.
“This could cause a huge disruption for businesses over a relatively short period of time – but it’s also an opportunity for those who move early,” says Carpenter.
“The risk in adopting late is that you materially increase the costs of the change, and you may miss out on opportunities.”
Carpenter says the competitive advantage from being an early mover could decline with every year of deferral, and that organisations who choose to deliver “just in time” for the closure of BECS for the 2030 deadline may face a comparatively exponential cost.
Beyond compliance
In this new world of payments, corporate treasurers will work with transaction banking systems freed from the burden of batch-processed payments and will be able to transcend time zones.
The ability to access data at any time will also deliver unparalleled transparency on an organisation’s financial position and create new opportunities in real-time treasury management.
“These changes create strategic opportunities for corporate treasurers,” says Carpenter. “It will be possible to access higher operational efficiencies and generate value in the end-to-end customer experience.”
“There is also the potential for liquidity optimisation that can deliver higher returns for lower overheads, and that means a more efficient treasury and the chance to reinvest back into the core business.”
Success in transition
As businesses turn their attention to the 2030 deadline, Carpenter says Westpac clients can take advantage of the bank’s real-time readiness assessments to help them determine how to prepare and manage the transition.
These assessments span an understanding of technical integration and change issues, in addition to processes and policies, through to safety and security measures.
Building the future state
Helping our clients to address their strategic needs and partnering on the stages to transition to real-time payments is at the heart of what we do.
That’s why we’re proud that the NSW Government has reappointed Westpac as a trusted banking partner. Westpac’s significant investment in the long-term future of payments is set to transform the way services are accessed and utilised across the NSW Government.
For example, we’re working together to help people and businesses through the rapid modernisation of our payments system, including the move away from cheques and bulk electronic clearing system in the next three to five years. This will mean paying for everyday services such as licences, car registration and kids school fees will be easier for everyone in New South Wales.
Real-time transition
There are already options in the market that will help corporates transition to real-time payments.
The launch of PayTo for billers in 2024 has enabled the migration of existing direct debit mandates from direct entry in a simple and smooth transition, and in an environment of enhanced security. Unlike BECS direct debit, PayTo is designed to be end-to-end online (on-line banking native). Digitised records with easy accessibility mean that no wet signature and no paper records are required.
Westpac has launched Dynamic Virtual Cards (DVCs) for institutional, corporate and government customers, giving them greater control and enabling fast and secure online and ‘tap and go’ payments. The cards can be generated while people are out in the field or working remotely, removing the need to deliver and hold a physical card.
“Our Dynamic Virtual Card capabilities deliver full visibility over how a treasurer can manage travel, entertainment, or supplier payments,” says Carpenter.
“Our capability provides real-time data and insights, and integrates with leading expense management systems, removing the hassle of one-to-one card management and reconciliation.”
Westpac is a digital leader in developing proprietary platforms, including PaymentsPlus for payables and QuickStream for receivables.
It is currently the only Australian bank offering a single end-to-end integrated service that brings together all the key payment solutions with the NPP’s more recent industry-wide options, offering clear benefits to existing and prospective customers in the real-time transition.
Delivering real-time advantage
Westpac is investing in its digital transaction banking capabilities as it prepares for the new era and is now piloting Westpac One, a new core banking platform for institutional and large corporate customers to be rolled out from 2026.
Westpac One integrates modern payment processing and liquidity management and is designed to upgrade corporate treasuries for the next wave of digital innovation.
A native cloud-based solution, customers will connect to Westpac One for a flexible and modular solution across the institutional experience, enabling a tailored suite of capabilities configured for client needs.
The solution will offer one platform for all transaction banking functions, combining payables, receivables, reporting and control for corporate treasuries in an holistic operating environment.
Using Westpac One’s Treasury Co-Pilot, treasurers can leave their spreadsheets behind and experience the advantage of real-time data integrated into payment systems that operate to pre-set policy rules aligned with the corporate’s operational needs, risk position and investment priorities.
“Westpac One is the ultimate combination of real-time treasury automation,” says Carpenter. “With Co-Pilot, we now have the opportunity to introduce AI into day-to-day treasury management, and with that comes the opportunity for higher returns and lower overheads.”
Corporate treasuries are on the cusp of the real-time digital era, and Westpac has the expertise and is making the technology investments so that it can be the most effective partner in this generational transition.
With Westpac One in place, the bank will be best placed to help Australian organisations’ seek a competitive advantage as they adapt to a real-time future that’s arriving fast.
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