How can I transfer money instantly in Australia?

The normal, unreliable way

Australia recently completed a piece of financial infrastructure called the New Payments Platform (NPP), which for the first time enabled real-time transfers between banks for retail customers, instead of the 1-2 business day transfers we had accepted historically.

The problem is that the ability to send and receive instant transfers is still far from universal, for a couple of reasons:

1. Many banks are still not properly connected to the NPP. As of 2020, many banks in Australia are still not able to either send, or receive through the NPP. This means that if the sender of funds is with a bank that does not support sending through the NPP, or the receiver of funds does not support receiving through the NPP, then the transfer will not be real-time. As of March 2020, only 78% of accounts were reachable via the NPP.
2. Most banks have intentionally added delays to the system. As a fraud prevention measure, most banks will delay the first NPP payment to a new payee by 24 hours, to give time to reverse the payment if it turned out to have been made by a fraudster. One bank has been reported to hold any payments made to a new payee in the first five days for 24 hours.

Due to the above problems, NPP payments are not useful in many places where real-time transfers are essential, such as in private sales of used goods.

The clever work-around: Beem It

Fearing disruption by a real-time payments start-up due to the problems described above, three of Australia's Big Four banks developed an app that allows real-time payments between any two people who sign up to the app with a VISA or MasterCard debit card. The app is called Beem It, and was bought by the payments processor eftpos in 2020.

The app enables a real-time transfer between two Australian bank accounts by making simultaneous transactions on the debit cards of the sender and the receiver.

Beem It charges the sender's debit card via VISA or MasterCard as a normal online card transaction, with a processing delay of a few days.

At the same time, Beem It makes an EFTPOS refund to the account of the receiver, which instantly credits the account, with no processing delay at all. The receiver is free to immediately spend that money, withdraw it, send it onward - whatever they like. 

The instant nature of a Beem It payments means it is actually able to be used for private sales, or even quasi-businesses like school sausage sizzles.

What's the catch?

The limitation is that both the sender and the receiver need to have signed up for the app, which includes verifying your identity and proving ownership of the debit card. The process takes about five minutes, but it's a lot less hassle than switching to a bank that supports the NPP, and avoids the problem of banks adding artificial delays to what should be instant transfers.

Beem It also has a $2,000 daily limit on transfers per day, and $10,000 per month, as of November 2020.

Does Beem It have any other benefits over a bank transfer?

Using Beem It has several advantages over a normal bank transfer, with the two most useful being:

1. You can request funds from a contact, who can then make the transfer with a single swipe in the Beem It app. This is useful for situations where the receiver knows better how much needs to be sent. For example, if Alice and Bob share an Uber on Alice's account for $12.50, Alice can send Bob a request through Beem It for $6.25. Beem It will even calculate the amount for Alice through their 'Split' feature.
2. Beem It will send an auto-reminder if a request hasn't been paid after a couple of days, to cut down on needing to follow up yourself