Commonwealth Bank has completed the first phase of a trial of PayTo, a new service that allows a payer to authorise third parties to make payments on their behalf.

Working with payments provider Paypa Plane, the bank conducted a trial bill payment agreement with Telstra and a set up a regular donation with The Shepherd Centre, a disability service provider.

A CBA spokesperson said the service remains in its trial phase and the bank will expand the trial over the next few months.

Great Southern Bank is also active in the development of a PayTo service, announcing this week that the service has been enabled for personal transaction and savings accounts.

Developed by NPP Australia (now part of Australian Payments Plus) as a mandate payment arrangement for consumers and businesses, PayTo was launched at the end of June.

Payers have been promised a high level of visibility and control over their payment arrangements, with the ability to view, authorise, pause or cancel payment agreements.

Merchants are also being promised benefits, such as being able to get upfront validation that the customer’s account details are correct. And when a payment is initiated PayTo will check that adequate funds are available.

This will avoid the missed payments and exception handling charges that plague the direct debit system.

While its main use will be as an up-to-date and more user-friendly version of consumer direct debits, it may also play a role in a range of corporate payments. 

Businesses and corporates will also be able to use PayTo to authorise a third party to facilitate real-time payments on their behalf, such as payroll and accounts payable. 

Payments service providers offering merchants access are Azupay, Ezypay, Monoova, Paypa Plane and Zai, which are all sponsored by Cuscal – an NPP participant. Zepto will offer services as an NPP connected institution.

CBA said its customers will operate PayTo using the CommBank App and NetBank.

NPP Australia said payers will be able to use PayID when they set up payment arrangements, rather than using their BSB and bank account number.