The National Payments System (NPS) encompasses everything to do with the movement of money. This involves a network of financial institutions and payment services providers (PSPs) along with the supporting technology, processes, procedures and legislation that together enable funds to be moved from payers (or senders) to payees (recipients) in whatever form or at whatever time, across the whole economy. The NPS therefore affects every individual, business and organisation in the country, including government.
In PNG we pay each other and businesses using a variety of financial instruments, including:
- Cash
- Cheques
- Electronic payments
- Real Time Gross Settlement
- Direct Credits
- Card & Mobile Payments.
Why are Payments Systems Important?
The National Payments System is a vital part of a country’s economic and financial infrastructure. Its efficient functioning, allowing transactions to be completed in a timely, reliable and secure manner, contributes to overall economic performance.
An efficient and reliable NPS:
- Promotes economic development and growth by:
- Enabling more efficient use of money
- Enabling the fast transfer of money between parties in different locations
- Reducing the risk of theft and fraud
- Reduces the reliance on cash
- Supports financial inclusion and the development of small and rural enterprises
- Minimises the risk of financial shocks
- Makes PNG more attractive as a place to do business.
What is BPNG’s Strategy for the National Payments System?
BPNG’s vision for the NPS was set out in a foundation document prepared in 2008 – Vision and Strategy for the future PNG National Payments System. In short, this document set a path to make PNG less reliant on paper based financial instruments (cash and cheques) through the use of modern electronic forms of payment, supported by enabling legislation. To this end, BPNG launched the National Payments System Development Programme on the 30th of November 2009. With the enactment of the National Payments System Act 2013 and the implementation of KATS and REPS, significant progress has been made to achieve the vision for the NPS
The strategy was refreshed in 2015 with the publication of Strategy and Action Plan for the Development of the PNG National Payments System 2015-2018. The strategy is currently being updated to incorporate the latest developments in payments.
What is BPNG’s role in the National Payments System?
BPNG has three roles in the PNG NPS. It is:
- The Regulator and Overseer
- The Operator of critical payment systems, and
- A Participant in its own right as a bank, in particular being banker to the government.
In undertaking these roles BPNG has a statutory obligation under the Central Banking Act 2000 to take all steps necessary to ensure the Payments System functions efficiently and reliably. While payment systems produce significant economic benefits to a country they can also involve significant risks at both a micro and economy-wide level, and the failure of the NPS to function smoothly can have devastating effects on a country’s economy. BPNG manages these risks across a number of Departments including Payments System Oversight and Supervision.
As custodian of the NPS, BPNG operates two key electronic systems:
- Kina Automated Transfer System (KATS), for:
- Real Time Gross Settlement (RTGS)
- Direct Credits
- Cheque processing.
- The PNG National Switch, for:
- Card payments
- Mobile payments.
In order to ensure reliability of these systems, BPNG has a number of backup systems which will activate in the event of a failure in one of the main systems. In addition, BPNG has specialist staff on call 24 hours a day, 7 days a week to resolve any issues that may arise in a timely manner.