Director of Enterprise Sales, Richard Watson, dives into why ‘Pay and Pray’ no longer cuts it, and the case for NDIS infrastructure change is no longer theoretical.
Long before I moved into the world of fintech infrastructure, I was a physiotherapist.
In those clinical years, my focus was entirely on patient outcomes—helping people regain mobility and independence. But there was always an invisible friction: the administrative burden of being paid.
In recent years, concerns about sustainability under the increasing cost of the NDIS have been largely centered on policy and participant budgets. But as someone who has sat on both sides of the table—as a provider and now as a payments specialist—a more fundamental challenge has been clear to me for a while:
Australia’s NDIS payments infrastructure is no longer fit for purpose.
In a National Press Club Address (April 22, 2026), Minister Mark Butler described the NDIS as having become an "ATM for shonks, grifters, fraudsters and crooks" in part because of a lack of 'visibility at the point of disbursement'.
The nuisance of legacy payments has, I believe, become a systemic risk.
The High Cost of ‘Pay and Pray’
The statistics are sobering.
According to the ANAO Auditor-General Report No. 48 2024-25, the NDIA’s current systems auto-approve 98% of claims, moving funds before legislative or risk-based checks can be applied. When paired with government estimates from the April 2026 'Securing the NDIS' reform package, which identifies up to $3.5 billion in annual leakage, the case for infrastructure change is no longer theoretical—it's urgent.
The mechanism enabling this is the legacy .ABA file. This batch payment format is a relic of 20th-century banking. It moves money, but you cannot ‘prove’ a claim in 2026 using a 1980s batch file format that only contains a BSB, Account Number, and a 16-character reference field. It cannot verify service necessity, provider registration, or line-item detail.
In short, it’s a ‘pay and pray’ model: funds move first, and we look for the data later.
For a physiotherapist or a support worker, this lack of transparency leads to reconciliation nightmares. For the Scheme, it creates a $3.5 billion hole that threatens the long-term sustainability of the very supports participants rely on.
With the Integrity and Safeguarding Act 2026 already enabling a mandate for electronic-only claiming, and the 2026-27 Budget funding a 'Prove then Pay' digital system, the .ABA format is no longer just outdated; it’s a compliance dead-end.
The Budget Reality: ‘Prove, Then Pay’
The 2026-27 Budget has sent a $37.8 billion signal to the market. The government isn't just tweaking the NDIS; they are structurally overhauling its payment integrity.
Specifically, the Budget has allocated $358.5 million to develop a new NDIS digital enrolment and payment system. The goal? To replace the current ‘pay and pray’ model with a system that requires evidence-based validation before funds are released.
The statistics that once felt like warnings are now the catalysts for law:
- The 98% Problem: The ANAO confirmed that 98% of claims currently auto-approve without validation. The Budget-funded digital system is designed to close this gap entirely.
- The Death of the .ABA: By giving the NDIA CEO the power to mandate electronic-only claiming, the government has effectively placed a ‘best before’ date on the legacy .ABA batch file.
The Triple Squeeze: From Policy to Parliament
For plan managers, the transition from 'theoretical reform' to 'legislated mandate' has landed with a bang in the Budget:
- Confirmed Revenue Compression: The Budget confirmed a 30% reduction in intermediary spending. Plan managers are now expected to do more (higher integrity checks) with 30% less revenue. Automating the ‘unprofitable’ manual work of checking claims is no longer a ‘nice to have’—it will be vital to protecting margins.
- Commissioned Panels are Coming: The government has reaffirmed that from October 2027, plan management will move to a commissioned panel. Selection will be tied directly to your ability to demonstrate the ‘fraud-reduction tech’ that the Budget has just funded at a federal level.
- Mandatory Evidence: The new Bill makes it clear: the NDIA will have greater visibility over every dollar. If your infrastructure can’t carry the metadata (the ‘why’) with the payment, you might be invisible to the new system.
Future-Proofing with a ‘Flow State’
At Zepto, we believe the solution shouldn’t wait for a government portal to be finished in 2027. The tools to bridge this gap exist today.
Achieving a functional ‘flow state’ requires three technical pillars:
1. Pre-Payment Validation (Zepto Validate)
The Budget’s focus on ‘fighting shonks’ targets ghosting and account substitution. Zepto Validate allows plan managers to perform real-time Confirmation of Payee (CoP) look-ups right now. By verifying a bank account belongs to a legitimate provider or recipient before the payment is triggered, you’re already meeting the integrity standards the Bill demands.
2. ISO 20022: Data is the New Compliance
The legacy .ABA file is ‘dumb’—it carries no data.
When I was a physio, waiting three days for a BECS transfer to clear was a cash-flow headache. Today, Zepto leverages the New Payments Platform (NPP) to deliver real-time, ISO 20022-enabled payments. Importantly, these payments are data-rich. This allows you to attach the service evidence and metadata the government now requires directly to the payment.
ISO 20022 messaging standards allow up to 280 characters (the ‘why’) to travel with each payment, enabling comprehensive remittance information, and making reconciliation instant and automated which is crucial for complex corporate and government payments.
3. Programmable Control with PayTo
As budgets are ‘reset’ under the new planning framework, PayTo offers a mandate-based approach. It can help recurring support payments stay within the ‘guardrails’ of a participant's plan, providing the digital audit trail that panel assessors will look for in 2027.
The Implementation Runway is Shortening
There is a temptation to see the 2030 completion date for these reforms and breathe a sigh of relief. I think that would be a mistake.
The July 1, 2026 start date for the new digital payment system—now just weeks away—isn't just a deadline for the NDIA; it's a deadline for every plan manager currently operating on legacy infrastructure.
Integrating a new payment architecture—testing reconciliation, redesigning workflows, and moving away from bank-intermediated batch files—takes months, not weeks. But as the first non-ADI to connect directly to the NPP, Zepto is uniquely positioned to guide migrations from legacy BECS systems to the modern ISO 20022 standards of the NPP.
The May 2026 Budget has made one thing certain: we can't fix the NDIS with policy alone. We must bridge the infrastructure gap. As a former clinician, I want every dollar to reach the participant. As a technologist, I know the only way to get there is to stop paying and praying, and start validating in real-time.
++
Sources & resources
- https://www.health.gov.au/resources/publications/securing-the-ndis-for-future-generations?language=en
- https://www.health.gov.au/ministers/the-hon-mark-butler-mp/media/minister-butler-speech-at-the-national-press-club-22-april-2026?language=en
- https://www.ndis.gov.au/publications/annual-financial-sustainability-reports
- https://www.anao.gov.au/sites/default/files/2025-06/Auditor-General_Report_2024-25_48.pdf
- https://www.anao.gov.au/sites/default/files/2025-06/Auditor-General_Report_2024-25_41.pdf
The author
