Australia’s latest real-time payments service, PayTo, is up and running today with six banks ready to start enabling customer accounts and six payment service providers offering merchants access.
PayTo was developed by NPP Australia, now a subsidiary of Australian Payments Plus, as an add-on service for the New Payments Platform.
Initially envisaged 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.
NPP Australia managing director Katrina Stuart yesterday told Banking Day: “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.”
NPP Australia said the payments service providers offering merchants access are Azupay, Ezypay, Monoova, Paypa Plane and Zai, which are all sponsored by Cuscal - a new payments platform participant. Zepto will offer services as an NPP connected institution.
The first financial institutions to enable payer customer accounts to use PayTo are Commonwealth Bank and its subsidiary Bankwest, Bendigo and Adelaide Bank, Great Southern Bank, People’s Choice Credit Union and RACQ Bank.
Stuart said the PayTo infrastructure is ready, and merchants and bank customers can expect to see services rolled out over the coming months.
The Reserve Bank is also a participant and will enable government payments using PayTo.
The RBA is a strong backer of PayTo and in May it told ANZ, NAB and Westpac, which had flagged that they would not be ready for the launch, that it expects them to be enabling PayTo by April next year.
It said it expects the banking industry to implement the NPP roadmap and is encouraging all participants to deliver PayTo no later than April next year.
The RBA wants NPP Australia and its parent, Australian Payments Plus, to play a role in supporting the wind-down and eventual closure of the direct entry system and migration of account-to-account credit transfers from direct entry to the new payments platform.
This goal is contentious, with Cuscal’s senior solutions architect Mark Hesse writing an opinion piece this week questioning why banks, especially small ones, have to make big investments in real-time payments when the current system works well (Cuscal distanced itself from the article).
Stuart said: “It has been the Reserve Bank’s goal for many years to move Australia to a world-class real-time payments system. We are working with the industry to manage that and banks are working with their customers. We all recognise that it will be a progressive migration and timeframes will vary.”
In the meantime, PayTo has been designed to allow a payer to authorise third parties to make payments on their behalf. NPP Australia envisages that consumers will authorise a PayTo agreement via their internet or mobile banking service.
People will be able to use PayID when they set up payment arrangements, rather than using their BSB and bank account number. Payers will have greater visibility over their mandate payment arrangements and greater control.
Merchants also benefit by being able to get upfront validation that the customer’s account details are correct. When