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The transition to real-time instant payments in Australia is another element businesses need to effectively tackle in the ever-changing financial landscape, according to the professional services company.
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Grant Thornton urges businesses to adapt to changing financial landscape
06 September 2024
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The Australian financial landscape continuously changes, which presents businesses with the challenge of efficiently overcoming and utilising them to maximise success in the current market.
Grant Thornton said SMEs need to now adjust to major changes surrounding payment methods as traditional payment methods such as cheques, direct debits, and credit payment systems (BECS) are being phased out.
According to the company, this transition will impact businesses across all industries from SMEs to large corporations and government services.
This will affect how they accept payments and make salary or supplier grants, Grant Thornton said.
“These changes are driven by the rising preference for digital transactions and a move towards account-to-account payments instead of traditional batch or expensive card payments,” it said.
The company suggested for all businesses to note what the key impacts might be on operations, potential risks to navigate, and what strategies should be applied to ensure compliance and an enjoyable customer experience.
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Grant Thornton said as businesses transition to real-time instant payments, businesses must update payment systems to support the new instant bank-to-bank transfers using mobile numbers and email addresses.
“This shift will require businesses to review existing end-to-end payments process, including how you handle customer payments, supplier transactions, refunds and salary disbursements,” the company said.
With the new transition, businesses need to consider the key areas of payment systems and methods, operational changes, security and compliance, investment and training, treasury operations, and advisory support.
The largest and most significant area Australian businesses need to comply with is payment systems and methods as they will need to reassess their current payments and processes and how this can translate to new banking technology.
Businesses will also need to evaluate the costs and benefits of current payment methods such as direct debit cards, credit cards, and BPay.
This includes considering fraud and security risks, fee savings, or additional costs and the impact on overall technology and operational costs.
Grant Thornton said the transition in operational changes will impact front, middle, and back-office operations as well as marketing and finance functions, websites, apps, and distribution channels.
“This creates an opportunity for businesses to redesign and streamline their processes, enhancing customer experiences, reducing operational costs, minimising manual tasks and addressing issues related to chargeback and fraud rules,” the company said.
Security and compliance need to be taken into account with new instant real-time payments to ensure compliance and avoid payment fraud.
Businesses are also required to budget for the new payment changes as implementing new payment infrastructure involves an initial investment.
Training and support for staff will also need to be considered, as well as process redesign, review of existing arrangements, contracts, and an overall payments strategy to ensure a smooth transition.
Grant Thornton said businesses may want to seek advisory support through these transitions as engaging with financial advisers will help develop a comprehensive transition plan to minimise disruption.
Along with advisory support, businesses must be aware of chargeback rules that both customers and businesses are used to will change due to treasury operations; however, businesses will benefit from improved cash flow and working capital.
Grant Thornton said it is in the best interests of all Australian businesses to act quickly in complying with new payment changes and the key areas associated.
“Businesses that act proactively will benefit from better cash flows, working capital and payments security, while those that delay are likely to face operational disruptions and additional expenses as legacy systems degrade and become redundant,” it said.
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