Real-Time Bank Transfers

In the era of wanting everything immediately, technology now brings us instant banking...

With the introduction of the New Payments Platform (NPP) and Real-Time bank transfers for the majority of Australia’s major banks in early 2018, now is the time to review what it means for your business.

The NPP’s official site describes it as a payments infrastructure set to enable real-time clearing and settlement for simple and complex payments, between two or more accounts.

So that’s instantaneous bank transfers between bank accounts 24 hours per day – 7 days per week. Funds will arrive in your account between 30-45 seconds after they are processed. You won’t have to wait to receive the money even over the weekend or outside bank business hours. Senders will also be able to include more information along with their payment, such as a longer 280-character text description of what the payment is for, or a link to a document containing further information.

Small business’s can potentially look forward to invoices becoming easier to keep track of, and if you’re a retailer, you’ll certainly benefit with your customers’ credit card transactions clearing into your business bank account almost immediately.

However, the flip side is that while the current delay of sometimes a few days in processing payments has been annoying to some, it has allowed anti-fraud analysts more time to catch and stop fraudulent transactions.

Financial institutions that connect directly to the platform must have the ability to clear funds in real time, with allowances made to ‘slow down’ payments if there is a need to respond to potentially fraudulent activity identified via built-in fraud screening and prevention steps. But do you have in house security measures for your business?

Here a couple of procedures we use at Hamilton Taggart Business Advisors to enhance our online banking security procedures;

• Use a separate stand alone device to do all online banking transactions. At Hamilton Taggarts we use a clean laptop with Wi-Fi that does not send or receive email. Its primary purpose is to do all our internet banking and it is not used for anything else.
• Use different passwords for different bank accounts and services. Don’t have one widely used password for everything you have online.
• Use passwords that are difficult to break. It’s all a hassle but in this day and age, one needs to show a little initiative when creating a password.
• Ensure your bank has access to two-factor authentication. It should be turned on for every service that you use like making a payment, changing your daily limit, changing a payee’s details or adding or deleting an administrator. Two-factor authentication involves sending a code to your mobile device which means you need to have the device as well as a password to gain access or make a payment.
• Regularly check you bank account and quickly question any unusual transactions with your bank.
• Training of your team is also critical to ensure that they know what to look for and what they should do if they suspect a problem has occurred.

It might also be time to talk with your insurance broker about getting a quote for Cyber Insurance to protect your business.

How it all works in practice will certainly be in the hands of the banks, however I believe small business should be taking steps now to ensure that the new technology works for your business.