Developed by the New Payments Platform Australia [NPPA], PayTo® is a new digital way for businesses to initiate pre-authorised payments from customer bank accounts in real time.
PayTo is often described as next-generation Direct Debit, but with a huge range of use cases from e-commerce to digital wallets, subscriptions and even one-off purchases, PayTo is much more than that. PayTo redefines account-to-account payments through innovation and improved experiences for both merchants and their customers.
But PayTo’s appeal is more than convenience alone. Significantly, PayTo’s secure bank application based agreement approval, agreement management process and payment notifications directly target the kind of fraudulent and unauthorised payments that have beleaguered traditional direct debit and cards for decades.
PayTo features strong fraud prevention measures out of the box. Merchants can rest assured that the correct account details are tied to their PayTo Agreements from the outset. Using PayTo means that no sensitive customer payment details are stored with the Merchant.
Rather, sensitive data is handled and stored in a safe and secure way on the New Payments Platform [NPP] infrastructure. Customers can also use their PayID to set up the PayTo Agreement and are not required to disclose their bank account details.
PayTo is built on a foundation of trust and authority that comes from a pre-authorised and validated digital agreement between merchant and payer.
In addition to creating the PayTo Agreement, the merchant's customer must authenticate themselves via their banking application in order to approve (or decline) and manage their PayTo agreements and payments (biometrics and secure entry to the banking application are standard).
PayTo is built on a foundation of trust and authority that comes from a pre-authorised and validated digital agreement between merchant and payer. The agreement is created by the merchant, and then authorised within the payer’s regular, secure internet or mobile banking app.
The two-step PayTo Agreement creation-and-authorisation process introduces positive friction and confirms:
- The identity of the payer.
- That the bank account belongs to that payer.
- The payment terms agreed between the payer and the merchant.
You can see the process play out in the animation below:
For merchants, this heightened level of real-time customer identity and account verification can remove the uncertainty and complexity of collecting payments from bank accounts. It'll also ensure that payment initiation requests process only when sufficient funds are present in the payer's account avoiding the potential for a late payment dishonour.
Not only that, merchants will love PayTo’s rich data sets that enable enhanced, real-time payment reconciliation at any time, all the time. Plus, there’s centralised, secure storage of PayTo agreements which are readily accessible if required for dispute resolution.
The NPP’s infrastructure has already given merchants the ability to receive funds in real time, pay out in real time, and–with PayTo–they will be able to pull funds directly from pre-authorised customer bank accounts in real time.
There’s a lot to like about PayTo. Like, real-time funds availability checks at the moment of each payment, real-time notifications at key stages of a payment lifecycle, and notifications of any changes that are made to the PayTo agreement by the consumer. Learn more about the ins-and-outs of PayTo in this family of articles.
PayTo is scalable, smart, secure and will fundamentally change the way merchants connect with their customers.
Why is that important?
Our Engineering and Solution teams spent months building Zepto’s PayTo offering, consulting with merchant clients and consumers alike to ensure we deliver the ultimate solution as the first non-bank Connected Institution [CI] to go-live on the real-time payment rails of the New Payments Platform for PayTo.
We encourage you to start your PayTo journey with Zepto now to ensure you’re ready for every bit of innovation coming down the PayTo pipe.
You’ll transform your customer experience, and you’ll enjoy a freer, faster flow of funds.
Australian bank account reachability for PayTo is steadily increasing with all major financial institutions expected to be live by the end of 2023.
PayTo is a registered trademark of NPP Australia Limited.