Five pathways to the New Payments Platform

The New Payments Platform brings important payments capabilities to Australia. It’s a platform that offers speed, data capabilities and simpler addressing (PayID), 24-hours-a-day, any day of the year.

These capabilities can be used by organisations and innovators to transform customer experiences as well as introduce digital processes to deliver back-office efficiencies and cost savings.

The NPP has been deliberately designed to be ‘open access’; a unique approach that makes it stand apart from other payments streams in Australia. Depending on the end-goal, there are five pathways an organisation could follow to access the NPP and its benefits:

1.     Become an ‘end user’ of the NPP

Businesses and corporates, like individuals, can use the NPP to make and receive payments. There are currently more than 70 organisations offering services via the NPP. Businesses can also receive payments via the NPP by providing customers with their organisation’s PayID which can be linked to the organisation’s bank account.

End user prerequisite: A relationship with one of the current 70 NPP enabled organisations

2.     Become an NPP Participant

Organisations that want to be able to clear and settle payments for their customers can connect directly to the Platform if they are an Authorised Deposit-taking Institution (ADI) or a Restricted ADI*. Because funds move across the Platform in real-time, prudential safeguards are required to meet international standards for real-time payments systems (as set out by the Bank for International Settlements). A directly connected Participant also needs to meet the technical requirements of standing up and maintaining an NPP Payment Access Gateway (PAG) in a real-time environment. A PAG is a piece of the NPP infrastructure that enables the transmission and exchange of messages between other PAG holders.

NPP Participant prerequisite: Meet the regulatory requirements of an ADI or RADI and technical ability to support an NPP PAG.

3.     Become an ‘Identified Institution’

An Identified Institution can offer their customers real-time data-rich payments via an arrangement with a directly connected NPP Participant who can clear and settle those payments on their behalf. This kind of arrangement negates the need to be either an ADI or a RADI, as well as the need to install and support an NPP Payment Access Gateway. This is the most popular way of accessing the Platform with more than 60 organisations currently using the NPP this way. Today there are a number of directly connected Participants that offer this type of connectivity arrangement, three of which are non-bank organisations whose business model is focused on providing wholesale access to payment streams.

Identified Institution prerequisite: a commercial relationship with a directly connected Participant.

4.     Become a ‘Connected Institution’

A ‘Connected Institution’ is an organisation that wants to connect directly to the NPP so they can initiate payments with participating financial institutions. This could include organisations like payroll providers or share registries. Because these organisations are not directly processing or clearing these payments they are not required to be an ADI or RADI. However, they are required to be able to meet the technical requirements to stand up and maintain their own NPP PAG in a real-time environment.

Connected Institution prerequisite: Technical ability to support an NPP PAG.

5.     Overlay Service Provider

An Overlay Service is a product or service that uses the NPP infrastructure’s capabilities in a customised way to define a unique payment service or process. The first overlay service launched from the Platform is Osko by BPAY. Through Osko, BPAY has defined the ‘messages’ or ‘rules’ that decide how an Osko payment will travel along the NPP in regards to speed, the type of information that goes with the payment and what the end customer experience is. Organisations that require customisation of the NPP messages or capabilities can become an Overlay Service Provider as long as they can show a sound business plan backed by the required expertise, as well as being registered to operate in Australia. Overlay Service Providers offer their product or service to NPP Participants to distribute to their customers. It’s important to remember that not all overlay services need to be customer facing – they could also be focused on business improvement processes, compliance or ‘Regtech’ solutions. It’s also important to remember that many payments innovation or processes do not require an overlay service, something you can read more about here.

Overlay Service Provider prerequisite: A business case that articulates a unique payment service or process that requires customisation of the NPP message set or capabilities. Must also be an Australian business with the expertise required to implement the overlay service.

Recently NPP Australia held a webinar explaining these five pathways. If you would like to listen to the webinar you can access it here.

To find out more information on how you can use the NPP, contact either an NPP participant (see a list of participating organisations here) or email NPP Australia at

*A Restricted ADI is the newly created class of regulated institutions launched by APRA to encourage competition while maintaining safety and stability in the financial system.

By NPP Communications