PayTo's 'Customer Control' Conundrum

Zepto’s consumer and merchant research into the appeal of PayTo has revealed one feature that is loved by consumers, but not loved quite so much by businesses. We think they should embrace it.

From mid-2023, PayTo will enable the majority of Australians to pre-authorise merchants to collect funds directly from their bank accounts in real time. Think of it as a digital, instant direct debit with a multitude of use cases and benefits like rich data sets that enable enhanced visibility over the status of a transaction, and real-time payment reconciliation at any time, all the time.

To ensure Zepto's PayTo offering hits the sweet spot for both merchants and consumers, our Product Innovation Team is undertaking a wide-ranging consumer engagement program. The program aims to not only glean insights about which PayTo benefits consumers value most, but also to help our merchant partners use those insights to promote PayTo by focussing on the benefits their customers deem most appealing.

consumer research interview

On the merchants’ side, Zepto’s Product Innovation Team is also hosting roundtables to understand acutely what merchants want and need from PayTo. Their insights have been integral in shaping the enhanced, feature-rich PayTo solution Zepto is developing.

Overwhelmingly, our merchant partners are enthused by the prospects of PayTo–even more so by our enhancements. But there’s one element that unnerves some of them: increased consumer control of the payment mandate.

The PayTo website describes this feature as enabling consumers to “view and manage PayTo agreements within internet or mobile banking.” Beside that sits three options: Authorise; Pause; and Cancel. Guess which two make some merchants uneasy?

Blind and slow, traditional direct debit might be a trusted workhorse but it is knackered. For most consumers the only time they think about direct debit is when a payment fails and they find themselves on an unhappy payment path. In fact, all parties in the direct debit payment flow experience pain points: 

  • Payers have to deal with a lack of transparency and control.
  • Merchants have to deal with failed payments, constricted cash flow, funding lags, and dissatisfied customers.
  • Banks have to deal with disputed payments, fraud, even confirmation that an explicit consent-to-payment agreement was established in the first place.


PayTo addresses each of the above frustrations, improving the experience for everybody in the payment flow. 

Perhaps not surprisingly, however, the majority of consumers we surveyed indicate that having visibility, flexibility and control over the dates of their scheduled payments is very important to them.

Yes, merchants will have to adjust to some of their customers self-managing their PayTo agreements. But it’s important to remember, consumers can already cancel their direct debit agreements and, more and more, we see–in line with rapidly evolving consumer expectations–merchants confidently offering ‘cancel any time’ subscription models. 

We’ve learned many things from our consumer research. We know, for example, that:

  • 96% of those we surveyed were somewhat or very open to new payment methods. 
  • 70% would be somewhat or very likely to use PayTo.
  • Nearly two-thirds saw the ability to pause and restart scheduled payments from their banking app as an important benefit of PayTo.

One of our research participants, Dean, described it like this:

PayTo looks like a really good idea. The thing with direct debits and stuff like that, is that they're always set on the company's terms. But if I know that I can schedule the payment for just after I’ve been paid, or move that date around a couple of days here and there to suit my cash flow, then that’s great.

Dean, research participant

This clearly highlights a significant opportunity for merchants who embrace PayTo. It’s not just the faster, freer flow of funds, the streamlining of back-office operations, and fewer dishonours and frustrated customers–it’s the message it sends to customers like Dean:

We see you, and we’re happy to transact with you on your terms. Sure, no problem–cancel, pause or reschedule to suit your personal circumstances. Let’s do this together.

Relinquishing control to the customer creates a foundation of trust and peace-of-mind on which enduring, rewarding merchant-customer relationships are built. This is borne out by customer-centric, flexible business models like those offered by Netflix and other streaming or subscription services, for example.

Our research shows that consumers are crying out for flexibility and control over their recurring payments.

Are you ready to let go?

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