Later this year the New Payments Platform (NPP) is due to be launched. The Reserve Bank of Australia has played a critical role in the development of the NPP.

If you are not sure of what the NPP is – in the words of the RBA it will be an open access infrastructure for fast electronic payments in Australia.

Currently bank transfers require a BSB and Account Number and are only processed during the hours a financial institution is open. It can take days for payments to be transferred from one financial institution to another, and that costs your business money.

The new NPP will no longer rely on BSB and Account numbers – you can use email addresses, ABN and mobile phone numbers for data matching. It will also be operating 24/7 to ensure real-time transactions are possible from one bank account to another bank account even if the two accounts are not with the same financial institution, and includes a real time confirmation of payment with an unlimited reference field.

What does this all mean – well real time payment and confirmation could be that giant leap towards a completely cashless society. It certainly appears that this could be part of the motivation behind the development of the platform – eliminating cash obviously can help in removing the cash economy – the enemy of every government.

It could also mean no more chasing debtors – with software companies like Xero making their platforms so easy and instantaneous to use, it’s becoming commonplace for suppliers of goods and services to invoice and receive immediate payment, and with the introduction of the NPP it could mean the money’s in your account before you leave the building.

Get up to speed with the NPP and the advantages to your business -  more information is available on the RBA website here.