BECS vs NPP: How Australian Payments Work

Australia's Two Core Payment Systems

Australia's domestic payment infrastructure rests on two primary systems that handle the vast majority of electronic fund transfers between bank accounts. Understanding how they work helps explain why some transfers arrive instantly while others take a day or two.

Both systems use BSB numbers to route payments to the correct financial institution. The key difference lies in how and when the payments are processed.

What is BECS?

The Bulk Electronic Clearing System (BECS) has been the backbone of Australian electronic payments since the early 1990s. Managed by the Australian Payments Network (AusPayNet), BECS handles Direct Entry transactions — the electronic credits and debits that flow between bank accounts every business day.

How BECS Works

BECS operates on a batch processing model. Rather than sending each payment individually in real time, financial institutions collect payment instructions throughout the day and submit them in bulk files:

1. A payer (or their bank) creates a payment instruction containing the recipient's BSB number, account number, account name, and the amount.
2. Multiple instructions are compiled into a batch file in the standardised BECS Direct Entry format.
3. The batch file is submitted to the payer's bank before a cut-off time, typically in the early afternoon.
4. The bank forwards the file to the BECS clearing system.
5. BECS sorts and distributes the instructions to the relevant receiving banks.
6. Settlement — the actual movement of funds between banks — occurs once or twice per business day through exchange settlement accounts at the Reserve Bank of Australia (RBA).
7. The receiving banks credit the funds to the recipients' accounts.

This process means that a payment submitted on Monday afternoon will typically arrive in the recipient's account on Tuesday or Wednesday. Payments submitted after the cut-off time, or on weekends and public holidays, are not processed until the next business day.

What BECS Handles

BECS processes an enormous volume of transactions each year, including:

• Salary and wage payments (direct credits from employers)
• Direct debits (utility bills, loan repayments, insurance premiums)
• BPAY payments (bill payments using biller codes)
• Government payments (Centrelink, tax refunds, grants)
• Superannuation contributions
• Supplier and vendor payments

For a detailed explanation of how direct credits and direct debits work within the BECS framework, see our guide on direct debit vs direct credit.

What is the NPP?

The New Payments Platform (NPP) launched in February 2018 as a modern, real-time alternative to the batch-based BECS system. Developed by a consortium of Australian financial institutions in collaboration with the RBA, the NPP was designed to meet the growing expectation for instant, always-available payments.

How the NPP Works

Unlike BECS, the NPP processes each payment individually and in real time:

1. The payer initiates a transfer through their banking app or internet banking — either using the recipient's BSB and account number or their PayID.
2. The payment instruction is sent immediately to the NPP's central infrastructure, known as the Fast Settlement Service (FSS), operated by the RBA.
3. The FSS settles the transaction in real time by debiting the sending bank's exchange settlement account and crediting the receiving bank's account.
4. The receiving bank credits the recipient's account, typically within seconds.
5. Both parties receive confirmation almost immediately.

This entire process occurs 24 hours a day, 7 days a week, 365 days a year — including weekends, public holidays, and outside of business hours.

Osko and PayID

The NPP supports overlay services that add functionality on top of the core payment rail:

• Osko (operated by BPAY Group) is the most widely used overlay service. When you see an instant payment labelled "Osko" in your banking app, it is travelling over the NPP. Osko enables the sending of payment descriptions up to 280 characters and supports request-to-pay messaging.
• PayID is a directory service that maps a memorable identifier — such as a mobile phone number, email address, or ABN — to a BSB and account number. When you pay someone using their PayID, the NPP looks up the underlying BSB and account number from the PayID registry and routes the payment accordingly. The name registered against the PayID is displayed to the sender for confirmation before the payment is submitted.

How BSB Numbers Fit Into Each System

BSB numbers remain essential to both BECS and the NPP, though their visibility to the end user differs between the two systems.

BSB in BECS

In BECS, the BSB is the primary routing key. Every Direct Entry transaction must include a valid six-digit BSB to identify the receiving financial institution and branch. Without the correct BSB, the payment cannot be processed. The BSB is front and centre in every BECS payment instruction, and users must enter it manually when setting up new payees.

BSB in the NPP

In the NPP, the BSB and account number remain the underlying identifiers for every account. However, PayID adds an alias layer on top. When a payment is made via PayID, the sender does not need to know or enter the BSB — the PayID registry resolves the alias to the BSB and account number automatically.

That said, NPP payments can also be made using a traditional BSB and account number, without PayID. In this case, the BSB functions exactly as it does in BECS — as the routing key that directs the payment to the correct institution.

Whether you are using BECS or the NPP, verifying the BSB before you transact is a prudent step. You can confirm any Australian BSB using BSBFinder's lookup tool to ensure it matches the expected bank and branch. For more on what BSB numbers are and how they are structured, see our guide on what is a BSB number.

Settlement and Timing

The most noticeable difference between BECS and the NPP is the speed at which payments settle.

BECS settlement operates in batch cycles tied to business days:

• Banks exchange batch files at scheduled times during the day.
• The RBA settles the net obligations between banks once or twice per business day, at approximately 9:00 am and 2:30 pm AEST.
• Payments initiated after the afternoon cut-off are held until the next business day.
• Weekends and public holidays introduce further delays, as no BECS processing occurs on non-business days.

NPP settlement is continuous and individual:

• Each transaction is settled in real time through the RBA's Fast Settlement Service.
• There are no batch cycles or cut-off times.
• Payments process on weekends, public holidays, and overnight with no delay.
• The recipient typically sees the funds in their account within seconds of the sender confirming the payment.

This difference in timing is why a payroll payment (processed via BECS) might take a day or two to arrive, while a payment to a friend via your banking app (processed via NPP) arrives almost instantly.

When is BECS Used vs NPP?

Despite the NPP's speed advantages, BECS remains heavily used for specific types of payments:

BECS is preferred for:

• Payroll processing — employers submit large batch files containing thousands of salary payments
• Recurring direct debits — billers process regular deductions in bulk
• BPAY — bill payments routed through the BPAY system
• High-volume bulk payments — government agencies and large organisations processing thousands of transactions at once
• Superannuation contributions — funds received in batch from employers

The NPP is preferred for:

• Person-to-person payments — sending money to friends, family, or individuals
• Urgent payments — time-sensitive transfers where same-day or immediate delivery is required
• Invoice payments — businesses paying individual invoices promptly
• Weekend and after-hours transfers — any payment needed outside of BECS business-day processing
• Payments where confirmation is needed quickly — real-time settlement means both parties know immediately

RTGS: High-Value Payments

Beyond BECS and the NPP, Australia has a third settlement system for high-value payments: the Reserve Bank Information and Transfer System (RITS), which provides Real-Time Gross Settlement (RTGS).

RTGS is used for:

• Transactions typically exceeding $1 million (though there is no strict minimum)
• Interbank settlements and financial market transactions
• Payments flagged with a High Value indicator by the sending bank

RTGS transactions are settled individually in real time through exchange settlement accounts at the RBA, similar to the NPP's Fast Settlement Service but designed for the wholesale and high-value market. Settlement occurs on the same business day, and the system operates during RBA business hours.

Most individuals and small businesses will never interact with RTGS directly. However, it is an important component of the overall Australian payments ecosystem, ensuring that large-value transactions settle with certainty and finality.

The Future of Australian Payments

The Australian payments landscape is evolving, with a clear trajectory toward real-time, NPP-based processing:

• Migration from BECS to NPP. The Australian Payments Network and the RBA have signalled a long-term shift away from batch-based BECS processing. While no firm retirement date has been set for BECS, the industry is progressively building NPP capabilities to handle transaction types currently reliant on BECS.
• PayTo. Launched as an NPP overlay service, PayTo is designed to bring direct debit functionality to the NPP. PayTo allows billers to initiate real-time debits with the payer's pre-authorisation through their banking app, offering more transparency and control than traditional BECS-based direct debits. Payers can view, pause, and cancel PayTo agreements directly within their internet banking.
• Increased PayID adoption. As more Australians register PayIDs, the reliance on manually entering BSB and account numbers is expected to decrease, reducing the incidence of misdirected payments. To understand what can go wrong with manual BSB entry, see our guide on what happens when you enter the wrong BSB number.
• ISO 20022 messaging. Both BECS and the NPP are adopting the international ISO 20022 messaging standard, which supports richer payment data. This will enable more detailed remittance information to accompany payments, benefiting businesses and their reconciliation processes.

BSBFinder remains a valuable resource as these systems evolve. Whether a payment travels over BECS or the NPP, the BSB number continues to serve as the foundational routing code for Australian bank accounts. Use BSBFinder to verify BSB details before initiating any transfer, ensuring your payment reaches the right institution every time.