Receiving payments - PayTo questions

PayTo is an easy and safe payment method that allows consumers to authorise merchants & businesses to initiate real-time payments directly from their bank account, 24 hours a day / 7 days a week / 365 days per year.

PayTo can be used by consumers in several ways. A couple of examples are; a digital alternative to direct debit, and allowing consumers to pay directly from their bank accounts where you previously needed a card (like for in-app purchases and online shopping).

PayTo is supported by all major banks and other financial institutions. Please refer to this list of Banks that support PayTo.

PayTo is an easy, secure payment option giving customers more control over making payments straight from their bank account.

Consumers can see their PayTo agreements in their internet or mobile banking apps, so that they know when payments will be debited from their account. Consumers can pause, cancel and make certain changes to agreements there too.

PayTo also allows consumers to use their bank account directly for payments that previously needed a card. So now you just need your PayID, or BSB and account number – no need to remember card details and expiry dates!

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• Pay directly and safely from a bank account: Customers only need access to their bank accounts to authorise and make a payment.
• Secure authentication: Customers login and use their mobile banking app or online banking credentials to securely pay, adding an extra layer of security on transactions.
• Verification of payee: Customers will see who they are making the payment to. The business they are paying are displayed in the customers mobile banking app or online banking.
• Safe instant payment from a bank account: Transactions are processed within seconds, allowing for immediate confirmation of payment sent and received.
• Reduced risk: PayTo provides customers a safer payment option due to the customer having full control over the payment by logging into their mobile banking app or online banking and authorising the transaction directly.

Your business will set up a ‘PayTo agreement’ with your customer. This is where you agree how much, and when, they authorise you to debit their account. It could be for a one-off, ad-hoc, or recurring payment.

The PayTo agreement will be sent to your customer’s bank, building society or credit union and will be presented in their internet or mobile banking app for authorisation.

Once the customer has authorised the agreement you can start debiting their account in accordance with the agreed payment terms.

Step 1: Customer Authorisation

The process begins when a customer chooses to pay for goods or services using a PayTo payment option at checkout or for a recurring billing scenario.

The customer is required to authorise the payment, typically through a secure online banking portal or a mobile banking app, which involves logging into their bank account to authenticate and approve the payment.

Step 2: Payment Initiation

Once the customer authorises the payment, the merchant or a payment service provider acting on behalf of the merchant initiates the payment request through the PayTo system.

This request is securely transmitted to the customer's bank, along with the necessary details such as the amount and the account to be credited.

Step 3: Transaction Processing

The customer's bank processes the transaction, ensuring that the customer has sufficient funds and that the payment request is valid.

If everything is in order, the bank debits the customer's account with the specified amount and sends a confirmation back to the PayTo system or directly to the merchant/payment service provider.

Step 4: Payment Settlement

The funds are then transferred from the customer's bank account to the merchant's bank account. This step might happen almost instantly or within a few business days, depending on the bank's processing times and the specific PayTo implementation.

The merchant receives a notification that the payment has been successfully completed, and the transaction is settled.

Step 5: Confirmation to Customer and Merchant

Finally, both the customer and the merchant receive confirmation that the payment has been processed successfully. The merchant can then proceed with fulfilling the order or providing the service, and the customer has a record of the payment.

The key features of PayTo are:

• Control and Visibility: PayTo gives consumers more control and visibility over their payments. They can manage and view all their payments in one place, authorising and managing them as needed.
• Real-Time Payments: It enables merchants and businesses to initiate real-time payments, which can be a game-changer for subscription payments and improving cash flow.
• Use Cases: PayTo supports various use cases, including the payment of eInvoices, real-time payments with QR codes, and outsourced business processes.
• Security: The service is offered by banks, financial institutions, and payment service providers, ensuring a secure transaction environment.
• Convenience: Consumers can use PayTo with their PayID or BSB and account number, making it a convenient option for managing bills, subscriptions, and online shopping.

A PayTo payment acts as a ‘pull’ payment, where the customer authorises the transfer of funds from their bank account by approving a Payment agreement between themselves and a business or merchant. In contrast, a PayID payment is a push payment, allowing the customer to send funds directly to a designated individual or business/merchant bank account.

PayTo transactions typically process in real-time or near real-time. This means that once the customer authorizes the payment, the funds are transferred almost instantly, ensuring quick and efficient transactions. This speed is one of the key advantages of using PayTo, making it ideal for situations where immediate payment confirmation is crucial.

Yes, you can cancel a PayTo agreement. Here’s how:

1. Through Your Bank: Most financial institutions that support PayTo will allow customers to manage and cancel PayTo agreements directly through their online banking platform or mobile app. Look for a section dedicated to managing recurring payments or direct debit agreements.
2. Contacting the Merchant:** Customers can also contact the merchant or service provider with whom they have the PayTo agreement with. The merchant can assist customers with canceling the agreement on their end.

Yes, among other uses, PayTo may be used as a digital and more modern alternative to the current direct debit system. Some merchants and businesses will move their direct debits to PayTo to give customers a better customer experience with more visibility and control over their payments.

PayTo supports a broad range of use cases. These include a modern alternative to direct debt, a digital payment solution for in-app and ecommerce transactions, more efficient business processes like outsourced payroll and accounts payable and the payment of e-invoices.

PayTo can also be used along with QR codes to develop better customer experience.