Paypa Plane gets NPP accredited

Paypa Plane

Business specialist digital payments service, Paypa Plane, has confirmed it has been accredited as a ‘Connected Institution’ on the New Payments Platform (NPP) – among several pathways enabling non-traditional FSIs to hook into the fast payments rail.

One of the key propositions of Paypa Plane is to enable institutions to swiftly access the NPP’s PayTo function, which, upon launch, will allow businesses to initiate real-time payments from their customers’ bank accounts.

‘Connected Institution’ accreditation is a critical step forward for Paypa Plane to enable this core payments initiation capability, which is expected to be switched on by NPP Australia from mid-2022.

The NPPA’s Connected Institution accreditation offers organisations that do not directly process or clear payments themselves – and therefore can operate without an authorised deposit-taking institution (ADI) licence – to connect directly to the near-real-time payments rail to initiate payments with participating financial institutions.

While they may not necessarily possess an ADI or restricted ADI, the NPP Australia notes that these organisations are still required “to meet the technical requirements to stand up and maintain their own NPP [Payment Access Gateway] in a real-time environment and meet all security requirements”.

A Payment Access Gateway (PAG) is core NPP infrastructure, enabling the transmission and exchange of messages between other PAG holders.

Connected Institutions must install a PAG within their environments to enable this payment initiation capability, whereby accredited NPP participants can instruct banks or account holders – through payment initiation messages – to process payments from customers’ accounts. To do so, however, they must receive an authorised mandate from their customer.

NPP Australia offers six different connection pathways to the NPP (among which includes third-party ‘Connected Institutions’), allowing organisations with differing needs and regulatory statuses to use the fast payments rails and tap into the data exchanged across the platform.

Part-owned by the Commonwealth Bank of Australia (CBA), which in February this year took a 20 per cent stake in the company, Paypa Plane’s platform serves as a digital link between businesses and payers, providing, it says, “transparency over the life of their payment arrangement”.

Through the partnership, CBA hopes to help fast-track the adoption of its PayTo capability for its business customers.