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New Payments Platform and the Challenges of Real-Time Payments

By Suresh Sambu | Senior Test Consultant

INSIGHTS // Articles

23 Oct 2017

#Banking|#Finance|#Innovations

INSIGHTS // Articles

#Banking|#Finance|#Innovations

By Suresh Sambu

23 Oct 2017

On 19th October, Planit hosted its Sydney Discuss event on the topic of ‘Ensuring Success in your New Payments Platform (NPP) Implementation’. Over 30 NPP project leads and department heads attended the event to learn about the experiences of their fellow NPP participants, who highlighted the challenges they have faced and how they overcame these challenges. Speakers included industry leaders Paul Briscoe, Head of New Payments Platform Delivery at Westpac, and Laura Johnson, Delivery Assurance Senior Manager at Cuscal.

New Payments Platform and the Challenges of Real-Time Payments

NPP Challenges

NPP promises to deliver near real-time payments 24/7 with the rich data content. Not only can these payments be made with the account and BSB number combination, but one can also use the mobile number or email id, called PayID, to send and receive payments.

However, adopting NPP means switching from batch to real-time payments processing, which creates several technological challenges in terms of real-time fraud checks, settlement and posting. From the availability perspective, financial institutions will have to ensure service level agreements (SLA) of 99.995% uptime in order to process the “instant” payments promised by NPP.

 NPP is a large and complex initiative that may take years to implement, and any significant projects like this require substantial monetary and time investments. It also requires compliance with new industry certification, so an implementation will need to be both fast and resilient to make the grade.

A lot of interest in NPP is about the improved customer experience, so managing expectations can prove to be challenging, particularly in the first months of public release. NPP is promising instant payments, so associated technology and processes will need to delivery on that promise.

Whether a bank is large or small, they need to spend their money wisely on new initiatives such as NPP. However, much like the NBN, the real value proposition of NPP is expected to come later as more overlay services are developed.

For many organisations, project budgets are set on an annual basis. For multi-year projects, this means the business case needs to be made year after year in order to receive continual funding. This can be particularly challenging when internal and external factors change over the course of a year.

Another challenge for NPP has been ensuring the customer experience while keeping the bank safe. However, keeping the bank safe can work against the customer experience, and vice versa.

Fraud protection has the potential to stop certain transactions from being instant. For example, when a customer registers a new address for their PayID, a bank can hold transactions due to a fraud check, but a consumer may still expect to send or receive money as usual.

How to ensure success
  1. Test, test and test again – NPP has a significant impact on existing payments systems, which means the regression test suite can be built while the NPP solution is still being designed. You will continue to grow this regression pack as you add new NPP functionality.
  2. Automate early and often – Automate as much as appropriate, carefully considering the return on investment. Also automate as soon as possible, building an automated regression pack early in the project lifecycle. This will help in crunch times during industry and ERM testing.
  3. Stay ahead of the industry – Service virtualization can be used to blueprint and mimic the entire range of request/response services to/from the dependent systems – an approach proven to significantly lower defect rates. Virtualization also makes it possible to test your solution internally without waiting for other industry participants to be available to test with you.
  4. Ensure customer experience – All of the effort and money spent will be for nothing if customer walks away with a bad experience. Through digital testing, you can cover all aspects of compatibility, usability, accessibility, etc. to make sure you leave a smile on your customers’ face.
  5. Performance throughout – NPP is all about how soon customer sees the money in their account, and this boils down to speed and performance. Performance testing just before go-live is not enough. There has to be a continuous focus on the performance of each component and system right throughout the SDLC.
  6. Plan your approach – Start on your path to success by setting up a core test team early and engaging them to establish a test strategy and approach. This way you can also move forward the build and prioritisation of regression, performance, and automation testing, as well as set-up of service virtualization, to keep on top of project quality.
  7. Don’t forget compliance – NPP requires participants to be compliant with PCI DSS, anti-fraud, anti-money laundering, etc. NPP is also about exchanging sensitive customer data in real-time with other participants, so security testing is essential to ensure your NPP solution is not vulnerable.

NPP is one of the most significant payment initiatives that the Australian financial industry has ever undertaken. Likely for that same reason, it has also turned out to be one of the most challenging.

From a quality perspective, any significant failures or errors in an NPP implementation may lead to a bad perception by the public, and that could be detrimental for the platform. That’s why Planit has been working diligently with financial institutions such as Cuscal, Indue, Fiserv, and ANZ to ensure that their NPP implementations are both stable and secure.

If you are considering implementing NPP or other payment platforms, Planit can help ensure that it is both stable and secure. Visit out Testing Services page to find out how we can assist with performance, automation, and security testing, and much more.

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