It’s going to be a busy few years ahead for payments transformation in Australia. The announcement last week that EFTPOS, the electronic point of sale debit card network, was moving away from bilateral links to embrace a central hub model with FIS comes on top of industry moves to finalise by the end of the year plans to implement a real-time payments and settlement utility for low-value payments by the end of 2016.

That new payments platform (NPP) program, being managed by KPMG after a competitive tender, saw nine new participants join at the end of August. The initial participants were the big four (ANZ, CBA, NAB and Westpac) plus Bendigo and Adelaide Bank, Citigroup, card issuer and ATM operator Cuscal, and the Reserve Bank of Australia (RBA).

Finextra blogger Dilip Rao pointed out in his July blog the interesting role that the RBA has on the program, as both a regulator representing the public interest as well as a bank providing the key settlement function and a user of the new utility.

But it’s also interesting to note the broad range of participants as more have come on board. There’s the tier 2 domestic and international banks – Bank of Queensland, Suncorp, ING, Macquarie, HSBC and Bank of America. But also more outsourcing operators, solution providers and non-bank payments providers – PayPal, Indue and Australian Settlement Ltd.

The proposed two-tier architecture will see the formation of a central open-access clearing utility called Utility Co, which will link to centralised Reserve Bank settlement facilities and use the ISO 20022 message format. This will be separate from any commercial, customer-facing services that can be developed based on the utility.

Requests for tender for the utility’s technology components will likely go out early next year, once all participants have had their say on the business requirements and technical concepts by year-end.  Vocalink, First Data and Accenture have publicly teamed for a pitch based on UK Faster Payments (and subsequent experience with Singapore’s G3 Immediate Payments system, which is due to go live in 2014). Other bidders with experience in RTGS and ACH implementation will also be showing interest.

But the Australian Payments Clearing Association and KPMG will also be looking for an initial “convenience service” to be launched with the utility in 2016 as a proof of concept and to kickstart the use of the utility by the industry. This service will focus particularly on mobile channel initiated payments and could come from one of the NPP participants or an external party.

Once the utility infrastructure tender is won, and the architecture is fleshed out, you can expect a flurry of activity from the vendors who sell payments solutions to banks. Similar to what we’ve seen with Singapore’s G3 infrastructure development, they will be pitching market specific changes to their hubs/services platforms/frameworks/gateways that promise to help banks connect and innovate on top of the central infrastructure capability.