Managing the transition to real-time, instant payments in Australia

These changes are driven by the rising preference for digital transactions and a move towards account-to-account payments instead of traditional batch or expensive card payments.  

This transition will impact businesses across all industries, from small enterprises to large corporates and government services, affecting how they accept payments and make salary or supplier payments.  

To help you optimise your operations as well as minimise customer and business disruption, we’ve summarised key impacts on your operations, costs, risks to navigate, steps to ensure compliance and strategies to efficiently redesign your customer and user experience.

Operational impacts

As businesses transition to real-time instant payments, it’s important to update businesses payment systems to support instant, bank-to-bank transfers using mobile numbers or email addresses, rather than traditional BSB and account numbers. This shift will require businesses to review existing end-to-end payments process, including how you handle customer payments, supplier transactions, refunds, salary disbursements and more.

Key areas to consider include:

• Payment systems and methods: Businesses will need to reassess their current payments and processes, map out how new banking technology requirements to your operations, and evaluate the costs and benefits of current payment methods such as direct debits and credits, cards, BPay and others. This includes considering fraud and security risks, fee savings or additional costs, and the impact on overall technology and operational costs.
• Operational changes: The transition will impact front, middle, and back-office operations, as well as marketing and finance functions, websites, apps, and distribution channels. This creates an opportunity for businesses to redesign and streamline their processes, enhancing customer experiences, reducing operational costs, minimising manual tasks, and addressing issues related to chargeback and fraud rules.
• Security and compliance: As businesses adjust to the new payment landscape, security concerns around chargebacks and fraud will require careful consideration. In addition, the ability to cancel direct debits in real time creates new considerations for your businesses to manage, including facing a higher risk profile and requiring more controls within your processes.
• Investment and training: Implementing new payment infrastructure involves an initial investment, as you’ll need to consider training and support for staff, process re-design, review of existing arrangements, contracts and an overall payments strategy, as well as user experiences to ensure a smooth transition. Businesses should budget for these costs and plan accordingly.
• Treasury operations: Businesses will benefit from improved cash flow and working capital through instant settlements, but the chargeback rules that both customers and businesses are used to will change.
• Advisory support: Engaging with financial advisors will help you develop a comprehensive transition plan that minimises disruption, and start implementing new payment technologies and infrastructure to maintain smooth operational continuity.

Businesses that act proactively will benefit from better cashflows, working capital and payments security, while those that delay are likely to face operational disruptions and additional expenses as legacy systems degrade and become redundant.

Regulatory compliance and risks

As your business is required to transition away from the legacy payment systems, compliance with regulatory, legal and customer privacy obligations from the Reserve Bank of Australia, APRA, ASIC and other authorities is essential. This includes adhering to updated payment standards and related reporting timeframes, including the recent Payment Times Reporting laws.

Failure to comply with the new regulations face potential fines, operational disruptions, reputational damage, and in turn losing customer trust. That’s why having a strong risk framework and adequate controls designs in place is crucial to successfully navigating these changes.

Our specialist payments advisory team is here to guide you through every step of the transition. We offer tailored advice on redesign your payment processes, managing compliance costs, and optimising payment processes. Contact us today for tailored advice to streamline your payment processes, minimise costs, and ensure a smooth transition. 

Learn more about how our Payments advisory services can help you

Visit our Payments advisory page