Uber has shown us how simple it can be to pay for things. Instead of rummaging for cash or a credit card, you just walk away and let the app deal with it. Even so, it usually takes a day or more for the actual payment to be processed, leaving you unsure how much you have left in your account.
This year the Australian banking system will receive a serious overhaul, allowing anyone to make a payment to anyone else simply … and instantly.
Real Time Processing
Selling the exercise bike you only used twice? Or the old car? You won’t need to worry about nervously taking wads of cash to the bank, or bank cheques, which give you security but take days to clear.
You’ll be able to make and receive payments in real time, so sellers can confirm the money is in their account before handing over the goods. Buyers will be able to check their accounts and know exactly how much money they have left.
Weekends and late night payments will become irrelevant. Instant payments will operate 24/7 x 365.
You’re no longer just a number
Bank account holders will be able to nominate an ‘identifier’ for their account so you’ll be able to send money using, say, an email address, or a business name, rather than a BSB and account number. Easy.
Expect apps, lots of apps
App developers will have access to the system without needing to involve banks. This means they’ll have a free hand to invent ways to make your bill paying life easier.
A welcome alternative to Direct Debits
The system will offer “request to pay” notices so billers can prompt regular payments without requiring you to sign up to direct debits. This will give you more control and avoid ‘balance shock’ – when direct debits suddenly shrink your account.
Keeping them honest
Because your regular payments under the new system will be from one ‘identifier’ (yours) to another (your billers’), you will no longer face a mountain of paperwork if you want to change banks. Well, not as big a mountain anyway. If enough people take advantage of this, it should be a way of putting the banks under competitive pressure.
We’re still waiting on our hover-boards but at least our banking system is finally joining the 21st Century. It is yet another step towards Australia becoming a ‘cashless’ society, which you can read more about here.