The shift to Payday Super will transform superannuation, bringing both new demands, as well as new and exciting opportunities for funds. Here’s what you need to know.
The current state of superannuation
200 million contributions annually: Today’s superannuation transaction network processes around 200 million contributions each year.
Error rates: An error rate of 1.6% is seen across the 200 million transactions that go through the superannuation transaction network. However some payroll providers and clearing houses report much higher error rates of 11-12%.
Current timeframes: Funds currently have 20 days to allocate contributions to member accounts.
The Payday Super shift
Significantly increased contributions: Under Payday Super, contribution volumes are expected to rise 3-5 times, to 600 million to 1 billion per year.
More errors than ever: With the number of contributions set to rise significantly, error rates are likely to increase. This will require funds to manage errors more efficiently, through automation and streamlined processes.
Shorter timeframes: Under Payday Super, it’s expected funds will have 3 days from when they receive funds, to allocate them to the member account.
The implications for super funds
Rising costs: With increased contribution volumes and tighter timelines, the costs of existing services may rise.
Higher risk of errors: If the error rate stays the same, there is set to be a large rise in the number of errors, requiring additional resources to manage corrections.
Demand for efficiency: Funds will need tools that reduce the admin burden, streamline workflows, and ensure compliance within reduced timeframes.
The opportunity: Automation and new payment methods
The evolution of super contributions brings new tools and opportunities for funds, including:
New Payments Platform (NPP): Real-time payment processing and PayTo, which allows funds to be pulled from accounts instantly, enable faster, more secure transactions.
Business automation: By automating tasks such as validations, error checks, and payment pulls, funds can reduce manual processes and improve efficiency across operations. Automation can be setup to only pull funds once validations have occurred, significantly reducing the admin burden of funds.
Maximise the value from your service provider
With the demands of Payday Super, funds need to get the most out of their service provider. MessageXchange is uniquely positioned to meet these needs:
Future-ready solutions: We support current batch payment methods, such as Direct Entry (DE) within the BECS framework, set for decommissioning in 2030, along with real-time options through the New Payments Platform (NPP), including PayTo.
Advanced business automation: Our automation tools are designed to handle complex processes, reduce errors, and minimise time spent on manual tasks.
Proven experience: Trusted by some of Australia’s largest businesses, we simplify complex workflows and payments, allowing funds to focus on delivering value to their members.
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