(5 July 2022 – Australia) Direct debiting is on the verge of enormous change as the New Payments Platform (NPP) “PayTo” functionality goes live.
PayTo creates a digital alternative to recurring debit payments and will allow broader payments to be made with bank accounts rather than using cards. The system will also allow payments to be made by third parties like cloud accounting systems, streamlining the processes of running payroll and paying accounts for businesses of all sizes.
Once activated by banks customers are said to gain greater control over recurring payments and it will decrease merchant costs.
The improved feature for the new payments platform (NPP) is a key priority for the Reserve Bank of Australia (RBA), which was very publicly frustrated with three of the Big Four majors for missing the June 30 cut-off for initiating PayTo for customers. CBA is prepared to enable the system soon however ANZ, NAB and Westpac are not ready and may not be able to offer PayTo customer enhancements until as late as Q1 2023 after the RBA relented to an extended deadline of then.
“For businesses with a retail focus, large billers like utilities and government departments, PayTo will enable them to receive fast and secure payments from their customers’ bank accounts, as an alternative to cards or online payment options from international players” said NPP Australia Managing Director, Katrina Stuart.