The latest PayTo breakthrough is going to disrupt the way you take payments in Australia

Back in July, I predicted that finance leaders would start to see PayTo make a change in the way you take payments in six to 12 months. Almost exactly six months later, GoCardless has become the first international payments company to connect to the New Payments Platform and accept transactions via PayTo. 

PayTo is the new way for merchants and businesses transacting in Australia to initiate real-time bank payments from customer bank accounts. Adding PayTo to our platform allows us to provide a range of additional functionality such as refunds, international payments and more with the option to sit side-by-side with traditional Direct Debit. But this isn’t just about us - it’s a significant breakthrough in the payments industry more broadly, showing that a payment method hailed as a ‘game-changer’ and ‘the future of payments’ is no longer just an idea; it’s here and available to merchants.

Australian payers are ready for innovation

We’ve been huge advocates for PayTo since its design and inception a few years ago. We knew it was time for Australia to join the payments revolution that we are seeing across Europe and the U.K. More than 40 banks, including Commonwealth Bank, Bendigo and Adelaide Bank, and Great Southern Bank, have shown their appetite by being PayTo ready months ahead of the New Payments Platform’s (NPP) April 2023 target PayTo integration date.

It isn’t just the payments industry that’s ready for innovation. In our new ‘State of Pay’ report, which surveyed 500 Australian decision-makers and over 1000 consumers), 51% of merchants said they want their business to process fewer credit card payments – a further 72% were concerned about the high credit card fees and how it impacts their bottom line. Not only does PayTo bypass expensive fees, but it will likely reduce failed payments because bank accounts, unlike credit cards, don’t expire or get lost or stolen.

The same report also revealed that over half of consumers would use new payment technology if it was more secure than existing options. What’s really interesting about this is that nearly a quarter of Aussies have heard of PayTo, with a whopping 83% of those in the know ready to consider using it once their bank makes it available. 

Education is still essential

In order to keep up with consumer interest and drive better conversion, merchants need to get serious about adding PayTo into their existing strategy. Currently, merchants can sign up to providers including GoCardless to immediately make PayTo available as an option within their payments tech stack. But in order to get the most out of PayTo and its range of functionality, education is still key. Taking advantage of the educational resources available such as PayTo University and the NPP website is a must, especially as it appears consumers are taking the time to educate themselves on their payment options.

I predict we’ll see some significant industry-wide improvements in the months following the NPP’s target date for 100% account coverage by April next year. By educating yourself now on PayTo and introducing it into your payments infrastructure early, you’ll be in a more competitive position when the eventual industry-wide adoption of PayTo happens – and by all current indicators, that will be a lot sooner than you think.