A World Class National Payments System for PNG
“A WORLD CLASS NATIONAL PAYMENTS SYTEM FOR PAPUA NEW GUINEA”
The Bank of Papua New Guinea (BPNG) is pleased to announce the completion of the third phase of Kina Automated Transfer System (KATS), relating to “Direct Credits” which went live on Monday, 9th February 2015. The KATS was introduced by Bank of Papua New Guinea for banks to transact with each other making direct payments to their customer’s account. The direct credit payment facility is a milestone achievement for Papua New Guinea. Business houses, companies, organizations and individuals can make direct payments using their funds held in a bank account to an account held in another bank.
The Bank of PNG updated the regulatory framework legislation for payments system through the National Payment System Project. With the updated legislative framework for payments, the BPNG worked closely with all commercial banks to implement the KATS. This has made significant changes to systems and processes.
The key strategic elements of the National Payments System will provide many benefits for the people of Papua New Guinea:
- Speed and certainty of payments
- Safety and reliability
- Cost effectiveness
- International standards
- Reduction of fraud and systemic risk
The automated exchange of cheque images brought challenges, requiring correct cheque formats and compliance with Financial Investigation Unit requirements. Initially this brought an increase in dishonoured cheques, however the cheque users who comply with the requirements are enjoying the benefit of reduced clearing times, now down to 4 days. This is expected to reduce further once all parties have become fully accustomed to the process, changes and requirements.BPNG will continue with further developments to the National Payments System to improve financial inclusion, reduce the cost of transactions and ensure that all citizens have access to modern, convenient, efficient and safe means of making and receiving payments.As an ongoing activity, BPNG will work actively with market players and other stakeholders to encourage the introduction of new and innovative payment instruments and services.