The end of BECS?

In Australia the Bulk Electronic Clearing System (BECS) governs how direct debits, automatic payments, bill payments, and direct credits work. BECS governs how a range of bulk electronic transaction types are made between its Participants. BECS covers direct debits, automatic payments, bill payments and direct credits.

The launch of the New Payments Platform (NPP) in Australia provides opportunity to move corporate payments to real time and data rich payments between bank accounts. 

For us in the UK, it also provides an interesting opportunity to consider how the future of BECS within the Australian NPP might help unwrap the future of Bacs within the UK’s proposed New Payments Architecture.

A recent post by the National Payments Platform provides a helpful background:

With the eventual closure of BECS in sight, the NPP offers more than speed for corporate payments.

Following consultation with its large BECS members, AusPayNet in its Future State of Payments Action Plan, has suggested a timeframe of between five and six years is potentially achievable for the closure of the BECS Framework. 
  
Built in the 1980s, BECS has been a steadfast enabler of the Australian economy. But the environment in which it operates has significantly evolved. Advances in technology have significantly sped up processes, and when combined with data, they become smarter and more automated. Consumer and business expectations have also evolved; we now presume things should happen instantly, seamlessly and with minimal effort, whilst also being safe and secure. This is the environment that saw the emergence of the NPP in 2018.  

The NPP is modern payments infrastructure designed to enable real-time payments between bank accounts, 24 hours a day, every day of the year. It currently processes nearly three million payments a day reaching more than 76 million accounts across 105 participating financial institutions.  But the NPP’s world-class capabilities offer more than just speed.  

As well as enabling better customer experiences, migrating corporate payments (including those submitted in bulk) to the NPP enables more efficient working capital management, provides access to real-time data, and reduces manual handling and exceptions with instant payment outcomes. It also delivers more certainty and assurance through upfront account validation and payee confirmation, making it more effective in combatting financial crime and fraud. 

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