Payments poised for further integration

The payments landscape is set to become more integrated in response to consumer and businesses’ growing demand for digital services within apps and platforms they want to be in, according to BPAY Group Head of Product Brittany Kury.

“The trend we’re seeing is that there are going to be more payment options in more channels over the next few years that don’t require separate platforms. Payments won’t seem like such a separate thing that you need to compartmentalise, it will be integrated into your other daily tasks,” says Kury.

The COVID-19 pandemic has accelerated the digital trend with consumers demanding more convenient, lifestyle-embedded payments, according to Capgemini’s World Payments Report 2021. In Australia, more than half of consumers under 35 years of age now use apps to make their bill payments, according to RFi Group Research.

The BPAY payment service, which was first launched more than 20 years ago, has moved with the trend and is now found across multiple digital channels thanks to a suite of APIs that allow it to be embedded in FinTechs such as Beem It, Hnry, and Super Rewards. These FinTechs add value for customers by allowing them access to trusted and secure BPAY payments on their platform.

“We have a strong established brand, we’re secure, we’re trusted, and we open up opportunities for FinTechs and different groups to utilise those. They know that the payment is going to be processed securely in a way that they trust. Those underlying capabilities that we’ve created are designed to make a better and more personalised experience for customers,” Kury said.

For example, the BPAY payment capability means that a Beem It user can pay their electricity bill with BPAY, and then request their share from their flatmates and receive a notification that they’ve been paid, all without having to leave the Beem It app.

Payments need to be frictionless no matter what the channel, and offer real-time 24-hour transfers as standard. Nearly half (45%) of consumers now frequently use mobile wallets to make payments, up from 23% the previous year, according to the Capgemini report.

While open banking legislation in Australia is relatively new, moves are afoot to enable BPAY and Osko payments to be initiated outside of a traditional bank environment, creating more flexibility for consumers.

Business payments become more competitive

Kury says BPAY Group’s growing product suite has a presence across all three key segments: consumer, business and banks – with business the new payment battleground.

While payment speed and data are valued by consumers, they are the lifeblood of business, particularly SMEs that can be squeezed by cashflow issues. One in two SMEs consider real time payments highly valuable given it makes cashflow management and payment tracking easier, according to RFi Group Research.

“The future is information with money – there will come a time when we can’t believe that the two were separate. We’re still getting pieces of paper that are separate to payments, such as share dividends, and it’s unclear what the dividend was for,” says Kury.

Osko, BPAY Group’s near real-time payments service that uses the New Payments Platform, is now integrated across 87 financial institutions which process an average of 2 million payments each day.

“Osko was set up to enable additional data to be sent with a payment so that we could start to build in richer information with a payment,” adds Kury.

The next phase of Osko’s development will introduce payment with documents, which could be as varied as an invoice, receipt, statement, pay slip, or any other piece of information. This will allow for easier reconciliation for businesses and consumers.

While transfers made over the BPAY service are not yet real-time, an upcoming innovation will bring a similar impact. Its next set of APIs will provide businesses with fast notification when a BPAY payment is made.

“We spoke to our billers and found that this notification system was a clear need for them. It’s going to be a big shift in helping them to use BPAY more effectively and release their goods to customers faster,” says Kury.

There will be more APIs to come with BPAY working closely with major banks to continue improving their operational efficiency. BPAY Group plays a key role as trusted enabler within the payments system, with banks and other providers then customising these services.

An executive survey conducted as part of the World Payments Report found that most payments firms were investing in third parties to develop innovative propositions (52%), orchestrating an API-based ecosystem, and moving into a platform-based business model (45%).

“Our members want to reduce costs, reduce risk and focus time and energy where they need to. So that’s something that we are very conscious of. A lot of our operational processes are already available through APIs, with more to come,” adds Kury.


This article has been republished with permission from BPAY Group

If you enjoyed reading this article and would like to be notified when future articles are posted, please subscribe to our newsletter.