Businesses or other organisations in Australia which choose to participate in the BPAY system would register as billers with the BPAY operating company through its bank. A biller must have an ACN or ABN and a banking relationship with an Australian financial institution. The BPAY operating company would allocate a biller number to the business, which would be printed with the BPAY logo on their bills, as well as an indication of what reference number a customer should use when making a payment. To make a payment, a customer would visit his or her Australian financial institution's online, mobile or telephone banking facility, where he or she would enter the biller code, reference number and payment amount as well as an indication of the account to be debited, which may also be a credit card. Some billers do not accept credit cards in payment through BPAY. The financial institution may limit the accounts which may be used for BPAY payments, and save the biller references information for use by the customer for future payments. As a security measure, when making a BPAY payment to a new biller, the financial institution will typically send a SMS message with a validation code to the customer’s mobile phone. The customer would need to enter the validation code before the transaction is processed. This may create difficulties if the customer is making the payment while abroad. The customer does not need to register for the service. The customer would usually not be required to pay a fee for the service, but the biller would usually pay a fee to its bank, and the credit card company if a card was used in payment. After a customer has made a payment using BPAY, the financial institution where the payment was made would send by electronic funds transfer the payment details to the biller's bank and the biller's bank would credit the biller's designated bank account with the payment amount, and the biller will be advised of the customer reference number and payment amount, for automatic or manual entry into its accounting system. Transactions completed before a cut-off time set by the financial institution will normally be processed and paid on the same day, otherwise it will be processed on the next business day. The remitting bank may charge the biller's bank an interchange fee.
History
The BPAY system was launched on 18 November 1997 as an electronic bill payment system for bill payments by phone. It was the world's first single bill payment service adopted across the banking sector. It soon offered bill payments over the Internet through financial institutions' online banking sites. In 2002 BPAY View was introduced, which delivers bills and statements electronically through Australian financial institution's internet banking sites. As of January 2015, BPAY payments can be made through more than 156 participating Australian banks, credit unions and financial institutions. More than 45,000 businesses accept payments using BPAY and each month approximately 30 million bills to the value of $24 billion are paid using BPAY.
