What is a PayID and how does it work?
By Mariana Almeida Marques
PayID is a universal ID aimed at making payments easier and more accessible. The PayID consists of a piece of information that is exclusive to you, such as a mobile number or email address, that you can use instead of traditional bank details to accept payments.
It was developed by New Payments Platform Australia (NPP), a national payments infrastructure mutually owned by 13 banks including HSBC, Reserve Bank of Australia and Citi Bank. Though PayID is exclusive to Australia, other countries have similar versions.
Why use PayID?
PayID brings great benefits to customers. Firstly, the fact that you don’t have to search for the bank details of the recipient and double or triple check them before initiating the payment, makes it a much simpler initial process. Secondly, the actual payment processing is instant and works 24/7, so there are no waiting times.
It is also an accurate system, because you will be able to check the recipient’s name once you have entered their email address or phone number, in what is called the payee confirmation step. This reduces the risk of accidentally typing an incorrect number and sending money to the wrong account.
Lastly, it is also a safe way to send money because you don’t actually have to share your bank details or the recipient’s bank details at any point. Plus, all PayID payments are also subject to the banks’ regular screenings and authentication processes.
How it works
If your bank supports the PayID system, then you will have a PayID feature available in your bank account- the PayID that you set up will be automatically linked to your account. It works exactly like any other payment, except for the fact that instead of submitting the recipient’s BSB and account number, you only have to submit their email address or phone number.
BSB is an abbreviation for Bank State Branch, a six-digit number that, along with the account number, is used to identify your bank account. The BSB number is exclusive to Australia, and you will need to submit the recipient’s BSB and account number when making payments. If you are using PayID, you don’t need to insert either of these numbers.
Where can you use PayID?
You can only use PayID in Australia. Most of the Australian banks and building societies support this type of payment, but you see here all the financial institutions that accept PayID.
Whilst PayID is exclusive to Australia, there are similar services available in other countries. In the UK, for example, you can access the Paym service- available in 15 UK banks and building societies. PayPal also allows you to send and receive money internationally using only email addresses as identifiers.
Is PayID secure?
PayID is subject to the same authentication processes as all other payment types, so it is as secure as any other payment. In fact, it has a lower risk of fraud and data breach because it doesn’t transmit any bank details, such as BSBs and account numbers, during the payment process- only the PayID information you submitted (a phone number, for example).
How to register your PayID:
PayID is a feature available in most banks, and you should be able to see it if you log in to your bank account through a website or app. Usually, it is under the “payments” section, though it can vary from bank to bank. All you have to do is click in “manage PayID” and configure it by submitting either your mobile number or email address.
You then need to link your PayID to one account, so all PayID payments will be sent there. Lastly, you’ll have to add your name to your PayID- this is the reference that others will see when they pay you. You will receive a verification code via text or email, which you have to enter in your bank’s website. A confirmation email will be sent to you to notify you that the registration was successful.
What accounts can I link my PayID to?
The PayID is a unique identifier, so you can only link it to one bank and to one eligible account. However, if you have more than one mobile number, you may be able to create two PayIDs and link each to a different bank and different account.
How to make a payment to a PayID:
You don’t actually need to have a PayID to make a payment- you only need the PayID of the person you want to send money to, and you can do it through your bank’s app or website, providing that it accepts this payment system. Usually, you can find the PayID option under the “Pay Someone/Pay Anyone” feature.
Imburse can connect you to Issuers and payment providers around the globe- Australia included. By connecting to us, you can easily and quickly partner with your preferred payment providers to start offering services like PayID to your customers. Drop us a message below if you would like to know more about how Imburse can help your business- our team would love to hear from you.