Rumah » What is PayTo and what are the benefits?

What is PayTo and what are the benefits?

Jul 4, 2023 | Article, Featured

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What is PayTo?

PayTo is a new, digital way for businesses to initiate real-time payments from their customers’ bank accounts. Using PayTo, customers can pre-authorise once-off or recurring transactions to be processed in real time, 24/7.  PayTo was developed in partnership by the New Payments Platform (NPP) and the Australian financial services industry and launched on 1 July 2022. It’s expected to revolutionise the way we pay, offering compelling benefits for Australian merchants and their customers.  

How is PayTo different to direct debit?

PayTo transactions are essentially real-time direct debits. PayTo offers an improved payment experience for payers and payees by addressing many of the shortcomings of the direct debit process. Customers can see and control recurring payments via their bank’s app or internet banking portal, and merchants can confirm the availability of funds in real time, meaning fewer failed payments.

With traditional batch-based direct debits, it can often take days for a customer’s payment to be cleared – and it’s only then that a merchant will be notified if funds weren’t available and the payment hasn’t been honoured. With PayTo, money is debited, settled and cleared instantly.

In the short term, PayTo doesn’t replace traditional direct debits; it’s a more modern alternative.

How does PayTo work?

PayTo lets merchants send a payment agreement straight to a customer’s bank account. This PayTo agreement will detail how much, and when, the customer authorises their account to be debited by this merchant. The agreement could be for a once-off or recurring payment.

The customer then logs in to internet banking or their bank’s mobile app to authorise the agreement. Once authorisation has been provided, the merchant can begin debiting the customer’s account in line with the agreed payment terms.

How does PayTo benefit businesses?

PayTo provides several benefits for businesses:

  • Reliable payments: Real-time account validation ensures account details are collected correctly at payment inception.
  • Fewer failed payments: Real-time funds availability check at the time of payment means insufficient funds are immediately flagged, reducing the rate of failed payments and their associated admin burden.
  • Improved cash flow: Instantpayment processing means more consistent and predictable cash flow.   
  • Paperless: PayTo payment agreements are created and stored digitally, meaning there’s no need to collect and keep paper-based direct debit forms (and no more worrying about the security risks associated with holding this confidential customer data). 
  • Notification if things change: Businesses receive automatic notifications if a payment agreement is paused, modified or cancelled.

How does PayTo benefit customers?

PayTo gives customers better visibility and control over their payments:

  • Everything in one place: Customers can view all their PayTo agreements using internet or mobile banking, giving them complete oversight.
  • Easy to manage: Customers can pause, modify or cancel their PayTo agreements at the tap of a button.
  • Set up payments on the spot: All a merchant needs is a customer’s PayID or BSB and account number to offer a payment agreement to that customer instantly.
  • More choice: PayTo lets payees authorise payments that previously needed credit or debit card details to be taken from their bank account directly, meaning they don’t need to remember card numbers and expiry dates.

PayTo is an exciting development in the Australian payments landscape. It promises to deliver a better payment experience for businesses and consumers and supports a digital, real-time economy. Visit for more information.