The NPP has been designed to foster competition and make it easier for established or new payments providers to introduce new services. But whether this will result in lower fees to small businesses or any other classes of customers remains to be seen.
Is there a stand-out feature of the NPP?
Yes — the quality of the remittance information that will be able to be transferred will be much richer than what is possible today with the existing 18 character limit for Direct Entry Payments. This is thanks to the adoption of ISO 20022 payment messaging standards.
Impact of NPP
NPP will provide a faster way of completing payment transactions and various players in the payments ecosystem will be affected by this initiative.
Channels: New ones will be built and existing channels’ features will be upgraded to be capable to execute payments using NPP. Risk management systems: In the NPP era payments realisation is near real time, so robust risk management systems are needed and banks will make the necessary upgrades to deal with any risk. Payment processors: The role of payment processors will be critical as they will be the interface between ADIs and the NPP as well as between banks’ core banking systems. They will upgrade their existing capabilities to handle payments and reconciliation real time in NPP. Addressing the database for reference data: This is one of the innovative features of NPP and the role of technological companies will be crucial in building a scalable robust addressing database, which ADIs and payments processors will use for identifying both originators and beneficiaries. Source : www.adactin.com/npp/
