Payment rails are the infrastructure that enables the transfer of money between banks, payment service providers, and other financial institutions. For businesses, choosing the right payment rail depends on factors like speed, cost, geography, and customer satisfaction.
NPP (New Payments Platform) and Osko are examples of modern payment rails designed to facilitate real-time payments. Lightspark is trying to move past these payment rails by introducing a new category of payments infrastructure called the "Money Grid," which leverages Bitcoin’s decentralized foundation.
The Payment Rail Landscape
Payment rails are crucial for transferring money between parties. However, current systems can be slow, fragmented, and costly, often leading to inefficiencies and higher expenses for businesses and consumers alike.
Understanding NPP and Osko
How NPP Works
The New Payments Platform (NPP) is an open access infrastructure for fast payments in Australia, launched in February 2018. It allows households, businesses, and government agencies to make payments with near real-time funds availability, 24/7. Payments are simply addressed and can carry rich remittance information. The Fast Settlement Service, built by the Reserve Bank of Australia (RBA), enables individual transaction settlement in real time. Developed through industry collaboration, the NPP supports overlay services for innovative payment solutions. A typical transaction involves initiating a payment, which is then processed and settled almost instantly, ensuring immediate fund availability to the recipient.
Strengths and Limitations of NPP
Strengths
- Open access infrastructure allows broad participation by households, businesses, and government agencies.
- Payments are available to recipients in near real-time, operating 24/7.
- Supports richer remittance information and innovative overlay services for enhanced payment solutions.
Limitations
- Not all financial institutions or account types support all NPP features or overlay services.
- There is no explicit mention of international interoperability or transaction limits.
- Gradual rollout and incomplete coverage mean not all accounts are yet accessible via NPP.
How Osko Works
Osko operates by enabling fast payments within online banking between participating banks. Integrated into the 'Pay Anyone' section, users can send money to a BSB and Account Number or a PayID (mobile number, email, or ABN). Payments are processed in under a minute, 24/7. Built on the New Payments Platform (NPP), Osko leverages online banking infrastructure and supports real-time payments. A typical transaction involves logging into online banking, entering recipient details, confirming the payment, and sending it. The recipient receives the funds almost instantly, with some payments held for security purposes.
Strengths and Limitations of Osko
Strengths
- Osko enables near real-time payments, typically processing transactions in under a minute, 24/7.
- It supports PayID, allowing payments to be made using easy-to-remember identifiers like mobile numbers or email addresses.
- Osko allows for detailed payment descriptions of up to 280 characters, enhancing transaction clarity and reconciliation.
Limitations
- Osko is only available for domestic payments within Australia, with no support for international transactions.
- Payments may be held for security purposes, potentially delaying the transfer.
- Osko is limited to participating financial institutions, meaning not all banks or accounts support the service.
NPP and Osko Compared
Transaction Speed
Both NPP and Osko offer near real-time transaction speeds, typically processing payments in under a minute, 24/7. NPP enables immediate fund availability through its Fast Settlement Service, while Osko, as an overlay service on NPP, ensures instant payments between participating financial institutions. In comparison, Lightspark emphasizes real-time, global money movement, making transactions as fast as information on the internet.
Fees
Neither NPP nor Osko provide specific fee details, but both are described as cost-effective compared to traditional payment channels like RTGS and cheques. Lightspark, on the other hand, highlights its low-cost structure, enabling payments at a fraction of today’s costs with no hidden fees.
Cross-Border Capabilities
NPP currently focuses on domestic transactions, with future plans for cross-border capabilities. Osko is limited to domestic payments within Australia. Lightspark stands out by offering real-time, global money movement for Bitcoin, fiat, and stablecoins, supporting seamless cross-border transactions.
Security Protocols
NPP employs high standards of resiliency and security, including enhanced privacy through PayID and robust infrastructure. Osko benefits from these security measures but lacks specific technical details. Lightspark leverages Bitcoin’s decentralized foundation, providing strong security properties and compliance features for global transactions.
Operational Hours
Both NPP and Osko operate 24/7, allowing payments to be made at any time. Similarly, Lightspark promotes 24/7 availability, ensuring that money can be moved instantly and securely at any time, anywhere in the world.
How NPP And Osko Are Used
Everyday Consumer Payments
NPP and Osko enable fast, data-rich payments 24/7, ideal for everyday transactions like splitting bills or paying friends. Lightspark offers a global reach, allowing instant cross-border payments, making it superior for international transactions.
Business and Corporate Payments
NPP supports higher-value and bulk payments, suitable for payroll and supplier payments. Osko excels in immediate, smaller transactions. Lightspark's infrastructure reduces costs and enables real-time global payments, enhancing efficiency for international business operations.
Emergency Government Payments
NPP and Osko facilitate immediate disbursement of emergency funds, ensuring recipients get aid quickly. Lightspark's 24/7 availability and low-cost structure make it ideal for global emergency payments, providing instant relief across borders.
Property Settlements
NPP and Osko streamline property transactions, reducing reliance on bank cheques. Lightspark's ability to handle large, cross-border payments instantly and securely offers a significant advantage for international property deals.
Time for a New Standard
Lightspark offers a global payments infrastructure that leverages Bitcoin’s decentralized foundation to provide real-time, low-cost, and secure cross-border transactions, surpassing the capabilities of NPP and Osko by enabling seamless international money movement.
- Built on Bitcoin: Lightspark’s infrastructure and the Money Grid are built on Bitcoin’s open, decentralized foundation, leveraging the Lightning Network for instant, global payments.
- Instant Settlement: Lightspark enables instant settlement by connecting businesses to the Money Grid, allowing money to move like information on the Internet: instantly, securely, and at a fraction of today’s costs.
- Lower fees: The platform is designed to provide seamless, low-cost, and reliable payments across borders, with no gatekeepers, delays, or hidden fees.
- Cross-border security by default: Lightspark’s infrastructure is built to provide secure, cross-border payments by default, combining current financial infrastructure with new technology powered by Bitcoin’s decentralized and secure foundation.
A Modern Infrastructure
For businesses looking to transcend legacy payment systems like NPP and Osko, here’s what Lightspark brings to the table:
- Wallets: Lightspark Wallets enable businesses and developers to build advanced digital wallets with real-time access to Bitcoin, Lightning, stablecoins, and domestic payment rails.
- Digital Banks: Lightspark offers digital banks a way to connect to the Money Grid, facilitating global, real-time payments with low fees and regulatory compliance.
- Exchanges: Lightspark's solution for cryptocurrency exchanges leverages the Bitcoin and Lightning Networks to enable instant, low-cost Bitcoin transfers and seamless integration with the Money Grid.
- Stablecoins: Through Spark, businesses can create, distribute, and monetize stablecoins on the Bitcoin network, offering fast and cheap payment experiences.
Emerging technologies and evolving regulations are reshaping the future of payments. Lightspark offers real-time, low-cost global payments, bridging traditional finance with next-gen solutions. Don’t just choose between two outdated options—upgrade to a payment rail built for the internet age. Learn more or book a demo.
