Recently the New Payments Platform (NPP) was launched and offers Australian businesses and consumers’ greater efficiency and speed when it comes to financial transactions. Not only will business process efficiencies be introduced, cash flow management should also improve. Businesses that register will enjoy instantaneous financial transactions instead of waiting for up to 72 hours before funds are transferred from one financial institution to another. The service operates 24/7, which mitigates the need to wait until business hours commence before payment transactions can be processed. Further, changing banks or accounts now no longer requires suppliers to advise their clients of a change in banking details with the introduction of PayID; a unique financial identifier that is recognised by over 60 banks, building societies and credit unions throughout Australia.

 

With Australia experiencing 7,811 business insolvencies throughout the 2017 calendar year combined with government statistics indicating that payment delays contribute to the risk of over a third of businesses entering into insolvency, the NPP strategy will assist businesses with improving their cash flow. Australia’s large business sector is regarded to be one of the worst offenders globally when it comes to paying their suppliers particularly when compared to countries like Japan, Belgium, Switzerland and Germany. The NPP is a step in the right direction for Australian businesses and needs to be introduced as a continuous improvement initiative; however more encouragement needs to come from the Australian Government to change the behaviours of delinquent debtors.

 

To learn more about the NPP visit:

 

https://www.nppa.com.au/wp-content/uploads/2018/02/New-Payments-Platform-Consumer-Media-Release.pdf

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