Carsales first to put goods on Reserve Bank’s New Payment Platform
Online car yard Carsales.com partnered with a start-up to become the first non-financial business with a service on the New Payments Platform, the Reserve Bank system enabling instant payments between financial institutions.
Carsales’ service, called PayProtect, allows car buyers to put down a deposit on the vehicle they wish to purchase, which is held in escrow, while also allowing the seller to accept the sale, once they know the buyer is committed.
Once the deal is agreed, both parties push a button in a mobile application, and the cash is cleared within four seconds, rather than having to wait two to four days for clearance under the prevailing system where a BSB and account number are required.
CarSales.com chief executive Cameron McIntyre says the new instant payments system will bring peace of mind to buyers and sellers. Justin McManus
Carsales.com chief executive Cameron McIntyre said instant payments would increase peace of mind in what can be a fraught transaction.
“This means the end of that situation where you’re standing on your driveway at 10 o’clock at night, about to hand over your keys to someone who says they’ve paid for your car – but you’ve got no way of proving that, or whether the cheque they’ve handed you is going to bounce,” Mr McIntrye told The Australian Financial Review.
The ASX-listed Carsales worked with a start-up in which it also has an equity stake, Assembly Payments, to launch the service.
Assembly’s co-founder and chief executive Simon Lee claimed that while finance companies had started to use the New Payments Platform (NPP) for faster settlements, PayProtect was the first example of a trading company using NPP for payments for actual goods.
The fees for buying a car with PayProtect are slightly more expensive than traditional methods, as Assembly had to build in various dispute resolution processes, according to Mr Lee.
The Assembly Payments management team, from left: Darren McMurtrie (co-founder and CXO), Simon Jones (co-founder and CTO) and Simon Lee (co-founder and CEO).
All sellers pay 0.25 per cent plus $8, meaning the transaction cost on selling a $15,000 car would be $45.50.
Assembly had opened its application programming interface to the public, and Mr Lee foresaw a day where the New Payments Platform (NPP) could compete with Visa and Mastercard as a cheaper form of payment at point-of-sale terminals.
The aspect of the NPP relevant to Carsales’ PayProtect is its “fast settlement service”. This enables transactions to occur instantly within the Reserve Bank itself, between each bank’s Exchange Settlement Account, rather than having to exit and clear into another bank account, which can take two to five days.