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One in four payments that have used the Australian PayID look-up service have been stopped and/or amended, helping prevent mistaken payments and reducing the likelihood of being tricked by a scammer, the country’s national payments infrastructure has said.
Consumers are stopping potentially risky payments via PayID, an identifier service developed by the National Payments Platform Australia (NPPA) that allows users to recognise the name of the person or company they are paying in real time.
The news comes after the country’s antitrust regulator, the Australian Competition and Consumer Commission, warned that consumers and businesses had lost A$227m ($154m) to payment redirection scams during 2021.
“We’ve always believed that PayID can play an important role in protecting customers against fraud and mistaken payments, so we were pleased to see that PayID’s payee confirmation step has been a safeguard for at least one in four payments,” said Katrina Stuart, NPPA’s managing director, in a statement.
The findings derive from research commissioned by NPPA, which oversees the payment addressing service offered by more than 100 banks, building societies and credit unions in Australia.
The research revealed that 50 percent of total respondents — both users and non-users of PayID — worry about entering the wrong details when paying to account and Bank State Branch (BSB) numbers, which PayID is intended to replace.
In comparison to BSBs, registration of PayID and payments made using it are carried out within a bank’s, building society’s or credit union’s internet or mobile banking app.
When a person makes a payment to another person’s or business’ PayID, they are shown the name of that person or business before making the payment.
Stuart, who previously worked at American Express and with National Bank Australia, said that NPPA is working with participating banks to grow awareness of the PayID functionality, particularly as a tool for preventing fraud and mistakes.
“Today there are more than 11 million registered PayIDs in Australia. Seventeen percent of payments made via the New Payments Platform, which offers the PayID capability, are made using a PayID, representing 30 percent growth year-on-year,” Stuart said.
“We think there is an excellent opportunity for banks, building societies and credit unions that offer PayID to continue to build awareness of the service, particularly as a weapon against scams and mistaken payments.”
Meanwhile, the research also revealed that PayID has proven a success with Gen Z consumers, with 58 percent of PayID users between the ages of 18-24 claiming to use the service at least once a week.
NPPA, which was founded in 2013 and launched its instant payment service in 2017, processed more than a billion transactions in 2021, worth more than A$1trn, according to the country’s central bank.
The share of account-to-account credit transfers that are made via the NPPA has risen to around 30 percent, including most "pay anyone" transfers made through online banking, the Reserve Bank of Australia revealed.
The NPPA is also delivering Australian Payments Plus (AP+)
AP+ was formed to deliver benefits to Australian consumers and businesses by creating a stronger, more efficient, domestic payments organisation with a particular focus on payments innovation.
It brings together Australia’s three domestic payment organisations — BPAY Group, domestic debit card system eftpos and the NPPA — into one entity.
BPay Group was founded as an interbank bill payment service, but has since launched Osko, a mobile P2P scheme that utilises PayID and was the first overlay service developed for the NPP instant payments rails.
Through the merger, which was authorised by the Australian Competition and Consumer Commission in September 2021, the new entity aims to focus on meeting the needs of all payment users and representing the views of a diverse range of stakeholders.
