Azupay CEO Jean-Marc Barthe
Local payments start up Azupay has begun processing consumer to business payments via the New Payments Platform.
The company is believed to be the second consumer to business provider to connect an overlay service through the NPP following the launch in 2018 of the Carsales.com service in partnership with Assembly Payments.
Azupay has entered a deal to provide real time settlement service to the NSW Government for NPP-enabled payments including renewals of liquor and gambling licences.
Under the arrangement consumers and business customers will incur a merchant fee of 55 cents on each payment they make to the government – the same pricing for BPay transactions.
The Azupay business generates a unique PayID identifier for contactless transactions conducted online or over-the-counter by using QR code technology.
Azupay chief executive Jean-Marc Barthe said a program was in place for rolling out the new payments method to other NSW government agencies.
“We are also talking to the Federal Government and other state governments, but we are currently focused on deploying the capability in NSW first,” he said.
If the service gains traction it could displace transaction volumes that normally would go through processing platforms operated by Visa, Eftpos Australia and Mastercard.
“Removing the reliance on credit cards for these types of payments helps free Australians from the burden of credit card debt, fees and interest charges,” Barthe said.
However, it remains to be seen whether parity pricing with BPay will provide sufficient incentive for consumers to switch from established payment methods to Azupay’s service.
There is little evidence to show that Australian consumers are inclined to adopt QR Codes as a payment method.
Lance Blockley, a payments consultant with the Initiatives Group believes Azupay could deliver big savings to merchants.
“Whereas the primary use of PayID has been as a ‘set and forget’ alias for someone’s bank account, Azupay has turned it into a one time-use payment identifier,” he said.
“This has the capability for reducing the acceptance fees for merchants, particularly those with higher average transaction values.”
Another leading payments consultant Bradford Kelly suspects taking market share from existing market providers might be a challenge.
“It’s good to see innovation in the payments space,” he said.
“The incumbents will be hard to dislodge but Azupay will give them a good nudge.”