Merchants and billers will have a new way of getting paid starting July 2022 with PayTo, an instant account-to-account automated platform built for periodic and recurring payments.
Merchants and billers will have a new way of getting paid starting July 2022 with PayTo, an instant account-to-account automated platform built for periodic and recurring payments. With an improved customer experience when compared to legacy direct debit, PayTo brings straight-through-reconciliation, 24/7 instant settlement and notifications and the elimination of while eliminating dishonours.
PayTo payment initiation centres around a digital agreement held between businesses and their customers, outlining the terms of future automated payments. This may include the frequency, amount and expiry date. Once an agreement is approved by the customer, businesses can pull funds automatically with no further customer engagement required. To realise this automated end-to-end payment flow, key industry players are required to make PayTo a success.
New Payment Platform Australia (NPPA)
The NPPA is responsible for the national infrastructure which is required to support real-time data rich payments between financial institutions. The PayTo service is being built by the NPPA and the financial services industry based on this infrastructure.
Financial Institutions
Financial institutions have three key contributions to PayTo. Firstly, they are mandated to offer their customers the ability to securely approve, pause or cancel agreements through their online banking or banking apps. Financial institutions must also validate automated requests for payment against agreements in place and to ensure real-time settlement of funds. Lastly, financial institutions will have integrated fraud prevention and dispute processes.
Customers
Adoption of PayTo by payers will be driven by an improved digital customer experience that is enhanced with greater control when making purchasing decisions. The transparency and self-service capabilities of PayTo will be made available to customers either through their relationship with their product or service provider or through their financial institution. Customers will be able to easily move agreements between their accounts and even between other financial institutions.
Fintechs
It is only by partnering with fintechs like Azupay that an end-to-end payment flow can be realised. At it’s core, PayTo requires fintechs to offer merchants and billers the ability to initiate agreements between their business and their customers and to send notifications when an agreement has been approved, paused or canceled.
Another critical function that only fintechs will provide is initiating a payment request from the merchant or biller to the consumers’ financial institution. Fintech services validate payment requests against agreement terms, send instant notification of transaction status and provide reconciliation tools for business receivables.
Fintechs will also offer migration pathways to businesses with existing legacy direct debit requests. Either through batch or API, fintechs like Azupay will offer migration strategies, change management and customer experience support.
To complete your PayTo picture contact us for more information or join us in one of our webinars.
