Australia NPP — real-time settlement via the Fast Settlement Service
An Australian dollar payment sent day or night using a PayID instead of a BSB and account number, where the Fast Settlement Service settles each transaction one by one in real time across accounts at the Reserve Bank of Australia.
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Riya pays Arjun using his PayID
Riya (payer) → Bank Alfa (payer bank)
Riya sends AUD 400.00 late at night and only needs Arjun's PayID — his mobile number. She never sees or types a BSB or account number, because the PayID resolves to his account for her.
Step 1 of 5: Riya pays Arjun using his PayID
- 03PostingBank Alfa debits RiyaBank Alfa (payer bank)
- 04SettlementThe Fast Settlement Service settles this payment in real timeBank Alfa (payer bank) → Nordbank (payee bank)
- 05PostingNordbank credits Arjun, who can spend at onceNordbank (payee bank)
Full step-by-step text (works without JavaScript)
- 03PostingBank Alfa debits RiyaBank Alfa (payer bank)
Once the PayID resolves, Bank Alfa books the debit on Riya's account. This is a movement on the bank's own ledger, not the interbank money movement that follows.
- DR Riya's account at Bank Alfa — AUD 400.00
- 04SettlementThe Fast Settlement Service settles this payment in real timeBank Alfa (payer bank) → Nordbank (payee bank)
Unlike most retail instant systems, NPP does not wait for a batch. The Fast Settlement Service settles this single payment immediately across the two banks' Exchange Settlement Accounts at the Reserve Bank of Australia, in central bank money, which removes the interbank credit risk of deferred net settlement.
Each NPP transaction is settled individually and in real time by the FSS, so there is no accumulating interbank exposure between settlement cycles.
- DR Bank Alfa Exchange Settlement Account at the RBA — AUD 400.00
- CR Nordbank Exchange Settlement Account at the RBA — AUD 400.00
- 05PostingNordbank credits Arjun, who can spend at onceNordbank (payee bank)
With settlement already final in central bank money, Nordbank posts the credit to Arjun's account. He can use the AUD 400.00 immediately, any hour of the day or night.
- CR Arjun's account at Nordbank — AUD 400.00
What this simplifies: This diagram shows one payment between two banks; it omits NPP's overlay services, connector and identified-institution roles, and the exact PayID registry and messaging mechanics.
Sources for this flow2
- Official requirement
RITS, the New Payments Platform and the Fast Settlement Service ↗ — Reserve Bank of Australia
NPP payments settle individually and in real time via the FSS across ESAs at the RBA, unlike batch, deferred-net retail systems.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: One payer bank, one payee bank and a single infrastructure actor stand in for the full NPP participant and connector arrangements; PayID registry and messaging detail are compressed to the steps that change the money.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.