are paying and have an opportunity to confirm that they wish to make the payment. this is an extra step that will assist payers to make sure they are paying who they think they are. there are also verification processes in place for registering payids ( the system that allows customers to assign an alias to their bank account ) to ensure people are who they say they are. indeed payid registration can only take place from within a customer ’ s internet banking portal or app. the npp also has a fraud liability framework in place that is consistent with existing consumer protection frameworks, and allocates liability where fraud is the result of inadequate verification practices. but like all payment systems, customers need to be alert to the potential for fraudsters to trick them out of details that would allow a fraud to occur – like their passwords. 2 educating consumers on these risks remains an imperative for the regulators and for the financial institutions. conclusion the npp is an important piece of payments system infrastructure that will pave the way for further innovation in the payments system. it has taken many years of hard work from the industry, undertaken in a great spirit of cooperation. but we now have a world - class fast payments system that i encourage the industry to embrace and create valuable services for their customers. 1 fis ( 2017 ), ‘ flavours of fast ’, final report, june. 2 i am using the term ‘ fraud ’ broadly here, to include not only situations where there is a theft or misuse of account information, or the compromise or hacking of customer authentication details, but also to cover ‘ scams ’, where the victim is tricked or persuaded into making a transfer to the fraudster ’ s account. these might occur via forged invoices, from bogus emails from foreign jurisdictions offering a share of a large sum of money, various social media scams. the accc ’ s scamwatch ’, available at < www. scamwatch. gov. au / >, website provides a range of information and warnings for consumers. 6 / 6 bis central bankers'speeches

, which go through the direct entry ( de ) system, have also grown steadily over the past two decades. while the growth in direct credits was initially mainly driven by bulk payments such as payrolls and welfare, more recently they have been increasingly used to make person - to - person payments directly between bank accounts and to pay invoices. but while tried and tested, and cheap, the de system had a number of issues that became increasingly constraining as our e - society grew. first, while de payment files are exchanged multiple times during a business day, there is usually a considerable delay – often some hours – between when a payment is initiated and the time the funds are available in the beneficiary customer ’ s account. payments initiated on weekends and public holidays had to wait even longer until sometime on the next business day. second, there were only 18 characters of free text to indicate what the payment was for. this can be a significant limitation, particularly for one - off payments where the beneficiary requires a material amount of information to ensure the payment is dealt with appropriately. and finally, payers had to know ( and payees had to divulge ) the bankstate - branch ( bsb ) number and the account number and name to make the payment. these issues, among other concerns about barriers to innovation in the payments system, ultimately led to the reserve bank ’ s strategic review of innovation in the payments system, the conclusions of which were published in 2012. the strategic objectives set out in that review included a number of requirements of the payments system of the future : the ability to make real - time retail payments the ability to make and receive low - value payments outside normal banking hours 2 / 6 bis central bankers'speeches the ability to send more complete remittance information with payments the ability to address payments in a relatively simple way. sound familiar? these are indeed all the things that the npp will deliver. so where are we? the npp – australia ’ s fast payments system as you know, the npp launched to the public in mid february. it is the culmination of more than 5 years ’ work from inception to launch. it involved unprecedented cooperation between financial institutions to build the capability to send and receive individual payment messages between themselves in real time, with settlement also occurring transaction - by - transaction through the reserve bank ’ s fast settlement service. but it also required banks to upgrade their internal systems to allow posting to customer accounts within a