St George switches off Pay to Mobile

Bernard Kellerman Payments, mobile & wallets

Customers of Westpac's subsidiaries in the St George Banking group have been told their Pay to Mobile system is being switched off tomorrow (17 September).

Once this happens, customers of St George Bank, the Bank of Melbourne and BankSA will no longer be able to pay recipients or receive money via the St George mobile banking app.

The move is another step in the slow-motion rollout of PayID and Osko across the Westpac group, still unavailable to many customers more than 18 months after the New Payments Platform went live early last year.

"Westpac Group's strategy has been to progressively rollout Osko and PayID services to customers across our Westpac and St George brands," said a spokesperson for St George.

Banking Day understands that approximately 90,000 customers across the St George group will be affected by the Pay to Mobile switch. Once this service has been discontinued, the PayID roll-out can flow to the other two-million-plus customers of St George, BankSA and Bank of Melbourne.

As the St George group's Pay to Mobile customers and their payees would normally have two working days to collect their payments, access to the NPP will be delayed for at least a further three calendar days.

In the interim, the bank has advised its customers to use internet and mobile banking channels to make outwards Osko payments and receive them to BSB and account numbers.

"We will be letting all of our eligible customers in St George, Bank of Melbourne and BankSA know when it's time to register for a PayID," the St George spokesperson said.

Once these customers are registered for PayID, they will find that the same upper limits for the Pay to Mobile will also apply for Osko transactions.

"We will be utilising existing payee limits for all Osko payments to either a bank account or PayID," the St George spokesperson said.

Briefly stated, these daily limits are A$1000 to or from the same payer or payee, with a maximum of $10,000 in payment transactions per day.

The PayID access saga has been a drawn-out affair, with Westpac bank's retail customers the first to be given access to the New Payment Platform's the real time capability.

The platform has been gradually opened to all eligible Westpac customers, but has been a drawn-out process, starting in September 2018 for the first retail customers, and is still running. For instance, Osko payments were first made available to the bank's corporate customers using online and mobile services from 12 August 2019, and even then with a A$1 million payment limit.

The slow pace of adoption, with almost three million St George Group customers still unable to benefit from the New Payments Platform, reflects a serious disconnect between Westpac's core banking system and the St George Hogan platform – later upgraded as the renamed Celeriti.

This continued failure by the group to integrate all its brands under the same back office systems a decade after St George Bank's acquisition in 2008 has the potential to derail Westpac's multi-branding strategy – a threat not lost on group CEO Brian Hartzer.

This led the Westpac chief executive to assert in a March appearance before the House of Representatives Standing Committee on Economics that St George's Celeriti system was a legacy of the St George Bank takeover, and was "really quite old and therefore challenging to modify".

"The pathway that we took was to build the infrastructure and roll it out through the Westpac brand first and then to shift the effort, once we had gotten those basics in place, to the regional brands," Hartzer said.

With respect to this view, it represents a re-telling of the post-acquisition positioning by Westpac. Immediately after the deal, executives were bullish on the low integration costs and high synergies to be extracted – talking up the potential of the Hogan system to lift Westpac's performance.

For instance, in May 2010 Jason Millett, then general manager of strategy, execution and transformation for Westpac's product and operations division, told Computerworld Australia: "There is a really strong theme in our IT strategy around re-use. So the migration of our core banking platform onto the Hogan platform which has existed in St George for some time, people look at that and say it can't be good because it's not new.

"Well actually the Hogan platform with the recent investments that [technology vendor] CSC has made in it is a very innovative and leading edge platform that is clearly meeting the requirements of banks like Bank of America, and Wells Fargo, and a number of South African banks."

"Rather than spending the billion dollars that potentially our competitors are doing in the market, we are going to be taking a much more cost effective and probably more strategic approach in getting to a new core platform, or a re-used core platform, through consolidating onto Hogan," Millett said.