NPP Australia, in collaboration with 13 financial institutions including the Commonwealth Bank of Australia (CBA), has promised to boost payment efficiency by cutting out bureaucracy and reducing cash flow issues, and could potentially save super fund members millions, said a paper launched by CBA and KPMG.
Michael Eidel, executive general manager of cash-flow and transaction services at CBA, said for the superannuation sector, the new payment platform could mean millions of dollars a year in savings for organisations, governments, consumers and fund members alike.
Eidel said based on a three per cent investment return, the switch to real-time payments from the average two-day lag could see savings boost to $19.2 million annually, as funds would be earning interest rather than sitting in transit.
“This is above and beyond the savings available for members through greater administrative efficiency for all stakeholders in the system including funds and employers,” he said. “The NPP infrastructure is here, and businesses need to engage with the ecosystem, collaborate and co-design to deliver on the things to make a better experience for the super fund member.”
Brett Watson, partner of payments advisory at KPMG Australia, said the platform is far more than just a new way to pay.
“It represents a major opportunity for the superannuation industry to enhance member experiences and help solve business problems that the existing payments system couldn’t,” he said.