Introducing PayTo - Australian payments made better

Nov 29 2021
Business Payments Insights

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Real-time payments are about to be revolutionised in Australia with the introduction of PayTo from June 2022. Previously known as the Mandated Payments Service (MPS), PayTo is the latest initiative from the New Payments Platform Australia (NPPA), the platform responsible for delivering instant, real-time payments for all types of businesses and their customers since 2018.

What makes PayTo different

As a new way to pre-authorise digital payments, PayTo is a way for businesses to initiate real-time payments from their customers’ bank accounts. It’s a relatively simple concept, but its impact will be far-reaching, because PayTo has been developed to be more functional than legacy payment methods, such as direct debits. Payments will be more efficient and less complicated for businesses and customers alike. 

To understand how it works, first, it’s necessary to understand the difference between “pull” payments and “push” payments. As the name suggests, a push payment is when the customer has to initiate a payment from their bank account to a company or service provider - pushed out by the payer (customer); while a pull payment is a transaction initiated by a payee - pulled in by the payee. 

PayTo is a pull payment - once the customer validates an agreement set up by the merchant or payee, payments, whether one-off or recurring, will be made automatically once the payment initiation request has been sent.

Up until now, the NPP has only supported push payments where the payee must initiate the payment from their account via their banking channel. However, that will change as PayTo comes online, enabling customers to authorise third-party payment initiation via the NPP.

PayTo main features

PayTo builds on all the useful features introduced with the NPP platform, such as:

  • Payments cleared and settled in less than 60 seconds.

  • Around the clock availability, 365 days per year.

  • Descriptors that explain the payment for the customer.

  • PayID, a unique identifier, such as an email address or Australian business number (ABN), which can be used to direct and accept payments.

Because PayTo is data-rich and consists of digital payment arrangements (mandates), it solves many of the issues concerned with the previous system, which relied on paper-based mandates and didn’t give customers the visibility they needed. PayTo means customers have full control of their mandates within their online bank accounts. Now, setting up a payment will be more convenient and transparent, improving the payments experience for customers and also offer new benefits for businesses.

Benefits for businesses

With PayTo, merchants and businesses can now initiate real-time payments, whether one-off or recurring, in varying amounts, from customer bank accounts, removing payment uncertainty with account validation and fund verification built in. Additionally, businesses have full visibility when a payment agreement is paused, cancelled or altered.
PayTo means instant payments. Payments, such as direct debits, that would normally take 2/3 days through the Bulk Electronic Clearing System (BECS) are now processed in real-time.

PayTo is secure and protects against fraud. Customer and account verification can be carried out within the process, meaning less administration, automated reconciliations, and a reduced need to troubleshoot payment status.

Benefits for customers

Customers will have more visibility and control over payments coming out of their bank account. Whether it’s for a subscription, a cryptocurrency transaction or rental payments, PayTo offers more convenience and means less work for the customer. From the safety of their online banking system, users can set up agreements with full visibility over payments, authorising, pausing or cancelling agreements when necessary.

Zai is helping PayTo work for business

In terms of convenience, efficiency and security, PayTo will be a game-changer for the payments industry and businesses in many sectors in Australia. Companies such as fintechs, online platforms, property management companies and firms outsourcing payroll - in fact, any business looking to streamline their payment processes, will be able to move money more smoothly through their operations.

APIs will be central to making PayTo work seamlessly for businesses. While PayTo won’t go live until mid-2022, Zai is building new services to make the most of this exciting and revolutionary payment method, offering more flexibility, certainty and transparency to businesses and customers.

In the meantime, for more information on payment solutions that work for your business, get in touch at

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