PayTo is a way for a business to take payments straight from a customer's bank account, with the customer's permission, in real time. The customer approves a payment agreement once inside their own banking app, and after that you draw the payments you both agreed to. It runs on the New Payments Platform, the infrastructure behind fast bank transfers in Australia.
Almost everything written about PayTo explains it to the person paying a bill. This page is for the other side: the business, sole trader or practice that wants the money to arrive without chasing it.
How does PayTo work?
- You create the agreement. Through your bank or payment provider, not directly with the scheme. It carries the amount, the purpose and the frequency.
- Your customer authorises it in their own banking. It appears in their internet or mobile banking, and they approve it there with their bank's own security. Depending on the bank they may get an app notification, an SMS, an email, or a prompt when they next log in. They identify the account with a PayID or a BSB and account number.
- You get told either way. If they decline, you are notified and can send a corrected agreement. If they approve, you have confirmation that the account is real and that the customer personally authorised it, which is validation you never got from a paper direct debit form.
- You initiate payments against it. On the agreed schedule. The funds move in real time, around the clock, and land in your account immediately. Some payments can be held for additional security checks, so it is not an absolute guarantee of instant arrival.
The agreements themselves live in a central service run by NPP Australia, which is now part of Australian Payments Plus. That is what makes them visible to the customer in one place instead of scattered across the businesses that hold them.
PayTo and PayID are not the same thing
This is the most common confusion, and the names do not help. The simplest way to hold it: PayID pushes, PayTo pulls.
| PayID | PayTo | |
|---|---|---|
| What it is | A memorable alias for a bank account, such as a mobile number, email or ABN | A standing agreement that lets a business take payments from an account |
| Who starts the payment | The customer, each time | You, on the agreed schedule |
| Good for | One-off invoice payments | Anything repeating, or billed after the fact |
| Bank coverage | More than 100 institutions | More than 50 institutions |
They also connect, which is part of why people mix them up: a customer can use their PayID to identify the account when they set up a PayTo agreement. They are complementary rather than competing, and most small businesses will end up offering both. Balaana supports both.
PayTo compared with direct debit
PayTo is an alternative to a traditional direct debit, and Australian Payments Plus describes it that way rather than as a replacement. Direct debit still works and is not being switched off. What changes is the experience on both sides.
- Authorisation happens in their bank, not on your form. The customer approves it with their own bank's authentication rather than signing an authority you supplied. That is a much easier thing for a stranger to say yes to.
- Funds are checked before the payment goes out. PayTo checks upfront whether the account has enough in it, which cuts the number of payments that fail after the fact and the manual work that follows them.
- You find out what happened, quickly. You get an initial response saying the payment was accepted or rejected, with a reason if it was rejected, and then the final outcome. You are also notified when a customer pauses or cancels.
- Money moves in real time, 24/7. Direct debit is batch-processed and only runs on business days.
- The customer is in control, visibly. They can see every agreement they have, and pause, resume or cancel any of them, in their banking app.
That last point sounds like a risk to the business and mostly is not. Australian Payments Plus states plainly that pausing or cancelling a PayTo agreement does not change the customer's contractual arrangements with you. If they owe you the money, they still owe it. What you lose is the ability to collect it automatically, and you find out immediately rather than discovering it on a bank statement weeks later.
If a payment fails for insufficient funds you cannot debit the account, though you may be able to reattempt at least once depending on your provider.
Can I charge a variable amount?
Yes, and this is the part most people assume is not possible. A PayTo agreement does not have to be a fixed monthly figure. It can be set up for one-off, ad hoc or recurring payments, and a variable agreement can carry a maximum amount so the customer knows the ceiling they are agreeing to.
That opens up the cases a fixed subscription never covered: a cleaner whose hours change week to week, a bookkeeper billing actual time against a cap, a supplier invoicing on usage. The customer authorises the arrangement and its limit once rather than approving every individual amount.
What you cannot do is quietly raise the amount past what was agreed. Changing the payment terms means sending an updated agreement for the customer to authorise again. The customer cannot edit the terms themselves either, so neither side can move it unilaterally.
What do I need before I can collect by PayTo?
You cannot connect to PayTo directly. A business has to be sponsored by a bank or a payment provider that participates in the scheme, and you reach it through that provider's systems. Australian Payments Plus is explicit that commercial terms, including what it costs, are set by that provider rather than by the scheme.
Practically that means three things:
- An ABN. The identifier of the party initiating the payment is a required field on every agreement.
- A provider that offers it. Not every bank or payment provider supports PayTo for the business side yet, and the ones that do set their own eligibility rules. Whether a one-person business qualifies is that provider's decision, not a scheme rule, so ask before you plan around it.
- Customers whose banks support it. Covered below.
In Balaana, PayTo sits inside the $7 a month Plus plan, and payments carry the payment provider's transaction fee passed through at cost.
Is PayTo safe, and what happens in a dispute?
The scheme is governed by a rules framework set by NPP Australia, which covers liability for unauthorised payment requests and the process for recovering payments made in error. Banks are required to give customers the ability to authorise, view, amend, pause, resume and cancel their agreements, so that control is not something an individual bank chooses to offer.
Two things a business should go in knowing. First, payments can only be initiated in line with an authorised agreement, so the agreement is the boundary of what you can take. Second, if a customer disputes a charge, Australian Payments Plus refers the matter to your sponsoring provider rather than running a scheme-level process, so the dispute terms you are actually bound by are your provider's. Read them before you migrate a book of customers across.
Worth knowing on the customer side too: Australian Payments Plus runs a scam warning at the authorisation step, because impersonating a bank or a business to get someone to approve an agreement is a known attack. A customer who was not expecting your agreement request may well treat it as fraud. Telling them it is coming, before it arrives, is the difference between an approval and a declined agreement.
Moving existing direct debits across
You do not have to re-sign your customers. An existing direct debit authority can carry over to a PayTo agreement, with conditions:
- You must give customers at least 14 days' notice before the migration.
- A customer can opt out during that window and stay on direct debit.
- Once the agreement is in their banking, you wait 5 calendar days before initiating the first payment.
The agreement itself does not need fresh approval, because the existing authority carries over. Budget roughly three weeks end to end, and treat the notice as a chance to explain the upside rather than as a compliance step.
The limits worth knowing
- It is not universal yet. PayTo is in the online banking of more than 50 financial institutions, against more than 100 for PayID. Coverage for business accounts and business banking channels lags personal accounts, and at least one major bank still lists parts of its business offering as coming rather than live.
- Some account types are excluded. Credit cards, statutory trust accounts, accounts that need more than one signature to withdraw, and accounts with third-party access.
- No card can be attached. PayTo draws from a bank account. If you want card-on-file, that is a separate arrangement with a card processor.
- Keep another option open. For as long as coverage is partial, some customers will need a payment link, a card or a bank transfer instead.
Related reading
- Collecting payment through the invoice
- How to get paid on time
- Credit card surcharges in Australia
- What goes on an Australian invoice
Frequently asked questions
PayTo lets a business take payments directly from a customer bank account once the customer has authorised an agreement. The customer approves it inside their own internet or mobile banking, and the agreement records the amount, the purpose and the frequency. Payments then move in real time on the New Payments Platform.
PayID pushes and PayTo pulls. PayID is a memorable alias for a bank account, such as a mobile number or an ABN, that a customer uses to send you money. PayTo is a standing agreement that lets you take the money on an agreed schedule. A customer can use their PayID to identify the account when setting up a PayTo agreement, which is why the two get confused.
The customer authorises it inside their own banking rather than signing a form you supplied, and they can view, pause or cancel it there at any time. PayTo checks upfront whether funds are available, tells you quickly whether a payment succeeded or failed, and moves money in real time around the clock, where direct debit is batch-processed on business days only.
They can cancel the agreement, but Australian Payments Plus states that doing so does not change their contractual arrangements with you. If they owe you the money they still owe it. What you lose is automatic collection, and you are notified when it happens rather than finding out weeks later.
Yes. An agreement can cover one-off, ad hoc or recurring payments, and a variable agreement can carry a maximum amount so the customer knows the ceiling. You cannot raise the amount past what was agreed without sending an updated agreement for them to authorise again.
You cannot connect to the scheme directly. You have to be sponsored by a bank or payment provider that participates, and you access PayTo through their systems. You also need an ABN, because the identifier of the initiating party is a required field on every agreement. Your provider sets eligibility and pricing, so ask them whether your business qualifies.
Not yet. Australian Payments Plus puts it at more than 50 financial institutions, compared with more than 100 for PayID. Personal accounts are further ahead than business accounts, and some account types are excluded, including credit cards, statutory trust accounts and accounts that need more than one signature. Keep another payment option available.
Yes, and they do not have to re-sign. You must give at least 14 days notice, during which a customer can opt out and stay on direct debit, and you wait 5 calendar days after the agreement reaches their banking before taking the first payment. The existing authority carries over, so no fresh approval is needed.
Sources
Scheme facts on this page come from Australian Payments Plus, which operates PayTo, read on 21 September 2026. Bank coverage, account eligibility and what a provider charges all change, and the dispute and pricing terms that apply to you are your own provider's rather than the scheme's, so confirm both with them before you commit. This article is general information about how the scheme works, not financial advice.