PayTo in Australia

If that sounds like direct debit with a faster engine, that's roughly the right intuition. PayTo is the modern replacement for the BECS direct debit system that Australian businesses have used for decades. The Reserve Bank and Australian Payments Plus have set June 2030 as the sunset date for BECS, by which point most recurring payments will need to be on PayTo or another NPP-based rail.

PayTo launched in 2022 under its current name (its working title during development was the "Mandated Payments Service" or MPS). By the end of 2025, around 18 million PayTo agreements had been registered, and over 90% of NPP-enabled personal accounts at major Australian banks are now PayTo-eligible. Business adoption has been slower; only about 5% of recurring payment volume had converted to PayTo by the end of 2025. This is early-stage infrastructure, and the next four years are going to matter.

This page covers how PayTo agreements actually work, what's different from direct debit and from Osko, the banking-app control layer that's the real innovation, where adoption stands as of mid-2026, and what to know before either using PayTo as a customer or implementing it as a business.

Quick facts

Push vs pull: the architecture that matters

This is the distinction that defines PayTo and separates it from everything else we've covered.

A push payment is initiated by the payer. You open your banking app, choose to send money, enter the recipient's details, and the bank pushes funds out of your account to theirs. Osko and PayID work this way: you push, the system delivers. You're in control of every transaction at the moment it happens.

A pull payment is initiated by the payee. After you've previously authorised them, the merchant or biller can debit your account when payment is due. Direct debit (BECS) is the legacy pull payment system in Australia; PayTo is the modern one. The merchant pulls, your bank validates and settles, and the money moves without you triggering each transaction.

Both have a place. Push is the right model for one-off, ad-hoc, person-to-person transfers where the timing and amount aren't known in advance. Pull is the right model for recurring, predictable, billed transactions where you don't want to manually approve each one (your monthly gym membership, your quarterly insurance premium, your weekly SaaS subscription).

PayTo's contribution is that it brings pull payments onto modern infrastructure. Where BECS direct debit takes up to three business days to settle and uses paper-based or PDF-based mandate forms, PayTo settles in real time and runs entirely through the customer's banking app.

How a PayTo agreement actually works

The PayTo flow has three stages. Each is meaningful for understanding the user experience.

Stage 1: agreement creation. The merchant or biller creates a PayTo agreement that specifies the terms: the amount (fixed or variable), the frequency (one-off, weekly, monthly, quarterly, annually, or ad-hoc), the duration (open-ended or with an end date), and any limits (maximum amount per payment, total amount over the agreement period). The agreement is sent to the customer's bank for the customer to authorise.

Stage 2: customer authorisation in their banking app. The agreement appears in the customer's mobile banking or internet banking inbox. The customer reviews the terms (who's billing, how much, how often) and either approves or rejects the agreement. This happens entirely inside the bank's existing interface — no separate app, no paper form, no PDF to print.

If approved, the customer's bank performs real-time account validation: it confirms the account exists, that there are sufficient funds or facility to support the agreement (depending on bank rules), and that the customer has authority to authorise direct debits from this account. This validation happens at the time of authorisation, not at the time of the first payment, which is a structural improvement over BECS direct debit.

Stage 3: ongoing payments. Once authorised, the merchant can request debits from the customer's account according to the agreement terms. Each debit settles in real time through the NPP. The customer sees each payment in their account in seconds, with full reference data attached (up to 280 characters via ISO 20022).

The customer retains visibility and control throughout. PayTo agreements appear in the banking app under a dedicated section (the exact location varies by bank). The customer can view all active agreements, see upcoming payments, pause agreements temporarily, change agreement details where the merchant allows, and cancel any agreement directly from the banking app without contacting the merchant first.

This last point is the critical difference from BECS direct debit. With BECS, cancelling a direct debit required contacting the merchant, which sometimes meant phone calls, written notices, or extended back-and-forth. With PayTo, cancellation is one tap in the banking app, and the merchant is automatically notified.

Speed and real-time validation

PayTo payments settle through the same Fast Settlement Service that handles Osko payments, with the same near-instant timing: typically under 60 seconds, often under 15 seconds.

The real-time validation at agreement creation is a less-discussed feature that matters operationally. With BECS direct debit, the merchant doesn't find out a payment has failed until 1-3 business days after attempting the debit. The customer's bank rejects the payment after the fact, and the merchant has to wait days to learn about the dishonour. By that time, the customer may have moved on, the service may have been delivered, and chasing payment becomes a recovery problem.

With PayTo, both the initial mandate validation and each subsequent payment validate in real time. A failed payment is known immediately. A bank account that's closed, frozen, or insufficient is flagged at the moment the merchant attempts to debit, not three days later. This dramatically reduces the float and the failure-handling overhead that direct debit imposes on merchants.

The GoCardless 2025 Pursuing Payments report found that 63% of Australian businesses are losing money to late payments, and 17% are losing more than A$2,500 per month. The real-time validation in PayTo doesn't solve late payment problems by itself, but it does eliminate the days-long lag that compounds them.

Types of PayTo agreements

PayTo supports several agreement structures:

One-off agreements. A single ad-hoc payment authorised in advance. Useful for e-commerce checkout flows where the customer wants to authorise a specific transaction without storing card details.

Recurring fixed agreements. Same amount, same frequency. Monthly gym membership at A$60, quarterly insurance premium at A$340, weekly streaming subscription at A$12.

Recurring variable agreements. Variable amount within agreed limits, fixed or variable frequency. Energy bills that vary by usage, mobile phone bills with overage charges, ATO BAS payments that vary by activity.

Ongoing or fixed-duration. Agreements can be open-ended (continue until cancelled) or run for a fixed period (12-month gym contract, 24-month telco plan).

The flexibility is one of PayTo's selling points compared to BECS direct debit. BECS handled fixed amounts well but struggled with variable billing; merchants typically created multiple direct debit mandates or used credit card billing instead. PayTo supports the variable case natively.

Bank coverage in Australia

PayTo's bank coverage at the end of 2025 looks like this:

Consumer accounts. All Big Four banks (CommBank, Westpac, NAB, ANZ) plus most major regional and digital banks support PayTo for personal account customers. Over 90% of NPP-enabled retail accounts are PayTo-eligible.

Business accounts. Coverage is expanding but lagging consumer rollout. Some banks have full business PayTo support; others are still in phased rollouts through 2025 and 2026. If you're a business considering PayTo as a payee, check with your bank about current capability for receiving PayTo payments and creating mandates with your customers.

Banks confirmed as PayTo-active:

• Big Four: CommBank, Westpac, NAB, ANZ
• Major regionals: Macquarie, ING, Bendigo, Bank of Queensland, Suncorp
• Digital banks: Up, Volt (restructured), 86 400 (now NAB), various neobanks
• Credit unions and mutuals: Most major credit unions and customer-owned banks

The smaller banks and specialist institutions that lag on PayTo tend to be the same ones that lagged on PayID and Osko earlier. They eventually catch up; the rollout takes time.

Where PayTo genuinely shines

Five scenarios where PayTo is the right tool.

Replacing direct debit for subscription billing. Gyms, SaaS providers, streaming services, software subscriptions. PayTo gives the customer more control and visibility, and the merchant gets real-time validation and faster failure response.

Utility and insurance billing. Energy, telco, water, council rates, health insurance. The variable-amount agreement type fits utility billing naturally, and the customer can see upcoming charges before they're debited.

Lending and BNPL repayments. Loan repayments, BNPL instalments. The real-time settlement and reduced dishonour rate make PayTo cheaper to operate than BECS direct debit, and the customer's control over the agreement reduces disputes.

Recurring B2B payments. Wholesale supplier accounts, regular service contracts. The structured ISO 20022 messaging supports detailed remittance information that BECS couldn't carry.

E-commerce checkout without storing card details. A one-off PayTo agreement at checkout authorises a single payment from the customer's bank account, bypassing card networks entirely. Lower merchant fees than card processing.

The 2030 BECS sunset and what it means

The Reserve Bank and AP+ have agreed to retire BECS by June 2030. After that date, most of the recurring and batch payments that currently run on BECS (direct debits, payroll, scheduled bank transfers, batch supplier payments) will need to run on NPP rails, with PayTo as the main replacement for direct debit specifically.

This is a 4-year migration that's underway but moving slowly. At the end of 2025, only about 5% of recurring payment volume had converted to PayTo. The pace will need to accelerate sharply over 2026-2029 to meet the sunset date without disruption.

For businesses, the practical implication is that the cost of migration goes up the longer you wait. Merchants moving first secure adoption advantages and avoid the rush. Merchants waiting until 2029 will be competing for integration capacity with everyone else doing the same.

For consumers, the migration is mostly invisible. Direct debits you've authorised in the past will be migrated to PayTo by your bank and the merchant, and you'll see them appear in your PayTo agreement section of the banking app. The user experience improves; the underlying mechanics change.

Where PayTo falls short (or hasn't matured yet)

Adoption is still early. 5% of recurring payment volume on PayTo by end of 2025 isn't a lot. Many merchants you'd expect to support PayTo still bill via BECS or card. This will improve, but in 2026 PayTo isn't yet ubiquitous.

Business account coverage lags consumer. A business wanting to receive PayTo payments from its customers may find that its own bank doesn't yet fully support business-side PayTo capability. This is changing through 2025-2026.

Smaller billers haven't migrated. Many independent merchants, smaller landlords, and community organisations still use BECS direct debit. They'll migrate eventually, but slowly.

Integration costs for merchants. Implementing PayTo requires either direct NPP access (rare and expensive) or a connection through a payment service provider (Stripe, GoCardless, Zai, Monoova, Ezypay, and others). Smaller merchants may find the integration cost barrier delaying adoption.

Limited international reach. Like other NPP services, PayTo is a domestic Australian system. International recurring billing still uses card networks or specialist cross-border providers.

Customer education still needed. Many Australians don't yet understand what a PayTo agreement is when one appears in their banking app for authorisation. Adoption depends partly on consumer familiarity catching up with the technology.

How PayTo compares to alternatives

Against direct debit (BECS), PayTo settles in real time rather than 1-3 business days, validates accounts at agreement creation rather than at debit time, allows customer control through the banking app, supports variable amounts natively, and uses paperless mandates. BECS is being phased out by June 2030.

Against Osko and PayID, the comparison isn't direct. Osko and PayID handle push payments (you initiate); PayTo handles pull payments (the merchant initiates after your authorisation). The right choice depends on whether you want to push a one-off payment or authorise an ongoing relationship. Some scenarios use both: you might use PayID to send your first deposit and PayTo to authorise the ongoing subscription.

Against credit card subscriptions, PayTo costs the merchant less than card processing (no interchange fee) and doesn't require storing card details at the merchant. For the customer, PayTo doesn't earn credit card rewards and doesn't carry chargeback rights the way a card does. For merchants, PayTo is cheaper; for consumers, it's a tradeoff.

Against BPAY, BPAY is for one-off bill payments where you initiate each transaction. PayTo is for recurring authorised payments where the merchant initiates after the initial mandate. Different problems, different solutions; both are AP+ services.

For a method-by-method comparison, see our e-wallet fees and speed comparison.