What is PayTo and how could it help your business?

- May 2, 2023 3 MIN READ


The online payments landscape has evolved significantly over the past few years with new technology leading to added payment options for customers, more sophisticated fraud prevention, and a deeper integration of payments across Software as a Service (SaaS) platforms, writes Chris Dahl, Co-CEO, Pin Payments.

Despite this, according to the Payment Times Reporting Regulator, small businesses wait an average of 35 days for reimbursement and are left financially vulnerable due to poor payment processing by big businesses.

PayTo, a new digital payment method that enables Australian businesses to accept real-time domestic payments directly from customer bank accounts, could help with this problem. The New Payments Platform (NPP) has been available since mid-2022 and allows banks, building societies and credit unions to support PayTo transactions for their customers. 

How does PayTo work?

PayTo is revolutionising the payment landscape for businesses by enabling them to initiate real-time payments in a seamless and secure digital manner.

The NPP enables payments to be initiated by third parties safely, with customers providing their authorisation for payments to be processed in the form of a ‘PayTo agreement’. Customers are prompted to provide authorisation through their existing banking application.

The agreements made through PayTo are safely stored in a highly secure and encrypted database managed by NPP Australia, the governing body responsible for managing and operating the New Payments Platform.

The service provides greater visibility, streamlined payments and increased control over payment arrangements. However, PayTo is not just another alternative to direct debit. It offers a range of innovative features that make it a versatile payment solution for businesses and consumers alike.

For example, businesses will be able to support the linking of bank accounts for in-app payments and account-on-file type arrangements for eCommerce and subscription services. It also facilitates funding for other payment options, like digital wallets and buy now pay later services, making it a convenient all-in-one payment solution.

PayTo can also be used by businesses to enable third parties to conduct payments on their behalf, such as corporate payroll and accounts payable.

Customer using smartphone at checkout

What are the potential benefits for your business?

PayTo has several functionalities which provide broad, scalable and secure solutions for account-to-account payments for businesses. These include:

  • The option to use PayTo alongside QR codes to create a better customer experience for users for recurrent or once-off payments.
  • The ability to streamline payments for businesses for outsourced functionalities like pay runs, invoices and accounts payable.
  • Businesses can integrate PayTo with electronic invoicing, meaning businesses will get paid faster and more easily.
  • Fintechs can harness the power of PayTo to develop new tech solutions to improve customer services and experiences.

The NPP will also create a real-time account validation when a PayTo agreement is created and funds verification at the time of payments, as well as notifications and a secure centralised storage of agreements.

How to use PayTo

You will start to see banks and fintechs offering PayTo as a part of their services during 2023, enabling you to manage more of your business payments from your account quickly and securely.

Whilst PayTo is still emerging across Australia, the service will allow merchants and businesses to operate using a better alternative payment method. Furthermore, as PayTo agreements will exist within your banking or payments platform, you can rest easy knowing that your information is protected at the same security level as your financial institution.

Adding PayTo to your business’ range of supported online payments could help migrate more transactions from offline to online, bringing you added productivity and efficiency benefits with it.

For more information about PayTo visit

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