A Handy BECS FAQ
Do Zepto payments run on BECS?
Some do, yes. In fact, our industry-leading direct debit solution is a trusted, flagship product in the Zepto Toolkit of solutions.
Zepto's API opens up a unique set of access points into Australia's account-to-account [A2A] payments infrastructure: both BECS and the NPP.
With access to both, Zepto is able to offer unique blended solutions that leverage both payment frameworks. Many Zepto customers make use of both direct debit for reliable payment collections, and direct credits for payouts.
How do Zepto's BECS solutions differ from the banks?
Zepto was the first PayTech to be an approved AusPayNet Tier 2 BECS Participant. With our API-powered Direct Entry solutions, merchants can hit every BECS exchange point. They can hit the point most likely to deliver a successful payout to, or collection from, any given customer — not just the one or two exchange points offered by their bank.
Zepto's purpose is to give our customers access to the most flexible and modular A2A payments toolkit available anywhere to create the payment flows that suit them, not their banking partner.
This can reduce back-office headaches, contact centre interventions and dishonour fee frustrations that can negatively impact customer experience and loyalty.
Can Zepto help merchants transition from BECS to NPP?
Yes.
Zepto already offers industry leading payment solutions and experiences across both frameworks.
Our API and easy integration can give businesses the benefits of tomorrow’s payments ecosystem today.
Our product roadmap is comprehensive, focused on the now, and planning for the future. This is evidenced by our in-market, agile delivery of bespoke functionality to our enterprise client base, as well as our commitment to building future facing technologies.
By engaging with Zepto now, enterprise businesses can create customised payment flows on a secure, scalable, future-proofed platform that's ready for the 2030 retirement of BECS.
What kinds of payments can be made via BECS?
The BECS Direct Entry system is an efficient and reliable way of making low-value, bank-account-to-bank-account funds transfers like direct debit, direct credit and consumer ‘pay anyone’ bank transfers.
A feature of Direct Entry is its relative low cost because payment volumes are high and exchanged in bulk.
Even though BECS is mostly used for relatively low-value transactions, payers can transfer up to $100 million in a single transaction.
Direct debits are typically used by businesses with subscription revenue models, and billers for the regular collection of recurring payments. Examples of direct credit payments include those initiated by organisations that make bulk recurring payments such as payroll or superannuation contributions.
Why is BECS being retired?
Australia’s world-class payments system is a foundational component of the digital economy, and the BECS framework has done an incredible job since its inception in the 1980s.
As Zepto CEO Chris Jewell says, "A lot of people talk about the legacy system of BECS. But I don't think of BECS as 'legacy'. I think of it as a Hall of Famer. In the context of what it's delivered to Australia, it's been incredibly powerful as an engine of the economy for decades."
But in late 2023, the Governor of the Reserve Bank of Australia — Michele Bullock — delivered the Annual Payments Address at the Australian Payments Network Summit. In it, Governor Bullock described the Payments System Board’s strategic priorities, and drew a 2030 line-in-the-sand for Australia's legacy BECS framework.
BECS may reliably handle average annual values of more than $15 trillion — the majority of Australian consumer payments by value — but it processes them in batches, and only on business days. Furthermore, it is not able to send complete remittance information. As Governor Bullock noted at the 2023 AusPayNet Summit, "The limited number of characters stems from the number of characters that could be carried on a punch card! Decades on, this is no longer fit for purpose."
Australian payments are undergoing once-in-a-generation modernisation as they migrate across to the designed-for-digital New Payments Platform [NPP].
Why is the NPP seen as a better way to pay?
The New Payments Platform [NPP] is Australia’s real-time payments infrastructure. It was developed via industry collaboration to enable Australian consumers, businesses and government agencies to make digital, account-to-account [A2A] payments — with near real-time funds availability to the recipient — at any time. It facilitates the clearing and settlements of real-time data-rich payments for the Australian digital economy.
Use of the NPP continues to grow. A2A payments on the NPP can move and settle in real-time and carrying rich data enabling, for example, automatic reconciliation.
The NPP also uses the data-rich ISO 20022 messaging format, which is the new global standard for payments systems.
Payments through BECS can only use BSB and account numbers. By contrast, the NPP incorporates PayTo and the PayID addressing service, allowing payments to be addressed to an email address or phone number, and it also provides a confirmation of payee service. These features help to reduce mistaken payments and combat some scams.
How are BECS and NPP payments different?
The BECS system was designed for another era of bulk electronic transactions between financial institutions.
It is a low-cost and reliable payment system. But it has technical limitations that reflect its age, including delayed settlement and a restricted messaging format incompatible with the global standard for payments systems, ISO 20022. The batched nature of BECS payments can be an inconvenience for business back-offices, and their slower only-on-business-days movement can impact cash flow and customer experience.
For example, it can take up to three business/working days to receive confirmation of a direct debit payment.
NPP payments, on the other hand, are always-on and they move and settle in real-time. They carry more data, boast better fraud and audit controls, and enable automated straight-through processing and reconciliation, 24/7-365.
