Home > Latest News > Australia’s Direct Debit System Overhauled

Australia’s Direct Debit System Overhauled

A new direct debit payment feature goes live today, giving customers more flexibility and control over recurring payments.

PayTo is part of the sweeping changes to the finance sector, known as the New Payments Platform. It’s a new fast payments infrastructure built by the Australian financial services sector.

It’s a digital alternative to direct debit, giving “a new level of visibility and control”, according to New Payment Platform Australia.

It allows merchants and businesses to initiate real-time payments from their customers’ bank accounts. The customer will receive notifications, and can authorise them instantly.

Users can see and manage PayTo agreements in their internet or mobile banking app.

It also removes the need for a card, allowing customers to use their bank account directly for payments that previously needed a card, without the need to enter card details and expiry dates.

For merchants, this removes the need to go through Mastercard or Visa, who charge a fee for these services.

NPP explains: “A business or merchant will set up a ‘PayTo agreement’ with you. This is where you authorise how much, and when, you will pay for goods or services. It could be for a one-off, ad-hoc, or recurring payment.

“The PayTo agreement will appear in your internet or mobile banking app for your authorisation. Once you have authorised the agreement, the business can debit your account according to the terms that you have agreed.”

Although PayTo officially launched today, Commonwealth Bank is the only major that is ready to implement the feature, with Westpac, ANZ and National Australia Bank all missing the June 30 deadline.

BankWest, Bendigo and Adelaide Bank, RACQ Bank, Great Southern Bank and the People’s Choice Credit Union will all be rolling out the service soon.

“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,” explains Katrina Stuart, managing director of NPP Australia.

 



You may also like
Australian Consumer Confidence Falls To GFC Levels: Westpac
Consumer Confidence Up For Third Straight Week
Aussie Consumer Spending Drops 17% In One Week
Aussies Spent $56 Billion In Online Retail Over Past Year
people shopping in sydney
Consumer Confidence On The Rise Again