In the second half of 2025, PayTo payment volume grew 301%. Built on the New Payments Platform (NPP), Australia’s real-time payments infrastructure, PayTo enables payments directly from customers’ bank accounts. This payment method functions only with explicit customer agreement: businesses must have a digital mandate on file to debit a customer’s bank account.

Below, we’ll discuss how a PayTo agreement works, what advantages it provides over Bulk Electronic Clearing System (BECS) Direct Debit, and how to approach implementation.

Highlights

• A PayTo agreement is a digital mandate stored in the Mandate Management Service (MMS). It authorises a business to debit a customer’s account in real time.

• Customers control their PayTo agreements directly through their banking apps. They can pause, amend, or cancel at any time.

• PayTo is best-suited to businesses with recurring or preauthorised payment relationships, where its real-time validation and settlement offer clear advantages over BECS Direct Debit.

What is a PayTo agreement?

A PayTo payment agreement is a digital mandate that authorises a business to pull funds from a customer’s Australian bank account once or repeatedly. Without this formal consent record, no debit can be initiated. All agreements live in the Mandate Management Service (MMS), a centralised database operated by the NPP.

How do PayTo agreements work?

The PayTo authorisation process is designed to run in real time, from the moment a business sends an agreement request to the moment funds settle. Here’s how each stage works:

• Agreement request: The business sends a PayTo agreement request to the customer through the MMS. The request is typically accessed directly inside the customer’s banking app, not in an email or on a third-party form.

• Customer authorisation: The customer reviews the agreement terms within their bank app and chooses whether to approve or reject the request. They can see everything they’re consenting to before anything is debited.

• Payment initiation: Once the agreement is active, the company can initiate a payment request as long as the request abides by the agreement’s terms. If the amount, frequency, or timing falls outside what was agreed upon, the payment won’t process.

• Real-time settlement: Funds move over the NPP, which operates around the clock, including weekends and public holidays. Both sides receive nearly instant confirmation.

• Ongoing customer control: Customers can cancel their agreements at any time through their banking apps. They can also pause, transfer, and amend certain information. A cancellation is effective immediately in the MMS so a business that subsequently attempts to debit the affected account gets an instant decline rather than a delayed rejection days later.

What information is included in a PayTo agreement?

A PayTo agreement contains a structured set of fields that defines exactly what the business is authorised to do. Every agreement must include the following:

• Payer details: The customer’s PayID or Bank State Branch (BSB) code and account number, which identify the specific account to be debited.

• Payee details: The initiating party’s name and identifier, such as an Australian Business Number (ABN).

• Agreement description: An easily understood summary of what the agreement covers, such as a subscription, an instalment plan, or a utility bill.

• Timing: The start date.

Why do PayTo agreements matter for businesses?

PayTo agreements enable PayTo, which can offer greater payment certainty and speed and reduced failure rates. Here are some other benefits for businesses:

• Real-time validation: With BECS, a debit could fail days after initiation after goods or services had already been delivered. With PayTo, if there’s a problem, you’ll know immediately.

• Faster settlement: BECS runs on a batch processing cycle tied to business days. PayTo settles over the NPP at all hours, including weekends and public holidays. Companies that manage cash flow tightly will see a tangible difference between same-day and next-business-day settlement.

• Less opportunity for involuntary churn: A BECS debit that fails due to a closed account might take days to surface. A PayTo payment request that’s made through an inactive agreement is declined instantly. You can then retry with a different payment method or contact the customer before they’ve forgotten the interaction entirely.

• Simpler authorisation for customers: PayTo authorisation happens inside a customer’s existing bank app. There’s no redirect to a third-party portal and no PDF to sign. Customers who are already logged into their banks can approve a mandate in seconds, which helps minimise drop-off during checkout or onboarding flows where payment authorisation is a required step.

How can businesses effectively implement PayTo agreements?

Australian businesses don’t connect to the MMS directly. But they do make certain decisions about how the agreement is structured, communicated, and stored in their own systems.

Here’s how businesses can implement PayTo agreements:

Agreement design

Decide on your agreement structure (e.g., fixed vs. variable amount, frequency, duration) before any technical integration. These decisions shape both the customer experience and your internal workflows. Variable-amount agreements with realistic caps tend to work better than fixed agreements you’ll need to amend frequently.

Customer communication

The authorisation request appears in the customer’s banking app, but you control the context around it. Notify customers of the incoming request, explain what it covers, and give them a way to ask questions before they see it. Customers who understand what they’re approving are less likely to reject the mandate or cancel it shortly afterward.

Agreement references

Map your MMS agreement references to your internal customer records carefully. When a customer cancels or amends an agreement, you’ll receive a notification. You should act on it quickly. Inaccurate mapping between MMS data and your customer relationship management (CRM) system creates problems that compound over time.

PayTo’s real-time nature means errors appear fast in production. Testing in the NPP sandbox environment before going live helps catch misconfigured agreement templates or missing required fields before they affect customers.

Is PayTo the right fit for your business?

PayTo is well-suited to businesses that rely on recurring or preauthorised payments from Australian customers. Whether it’s the right fit depends on your payment model, your existing infrastructure, and how your customers typically pay.

Here’s how PayTo fits different kinds of businesses:

• Recurring billing businesses: Subscriptions, utilities, insurance, and instalment-based retail are all strong candidates. The mandate model is built for and delivers real value in ongoing payment relationships.

• Usage-based billing businesses: Platforms that bill for variable amounts each cycle benefit from PayTo’s variable-amount agreement structure, which handles fluctuating charges without requiring a new mandate each time.

• Card-dependent businesses: PayTo’s direct debit model means reduced costs associated with card payments and no card expiry problem. If failed payments due to card replacement or expiry are a significant cost, that’s a concrete reason to evaluate PayTo as an alternative or complement to card-based recurring billing.

• Businesses with individual transactions: PayTo isn’t the best fit here. The overhead of creating and managing a mandate often isn’t worth it for a customer who makes a single purchase.

If your business does decide to start working with PayTo, your team needs to be prepared. Customers can cancel PayTo agreements unilaterally and instantly through their banks, which affects how you handle subscription management and failed payment recovery. You should also have alternatives in your checkout flow such as BECS Direct Debit and card payments: not every customer will have a PayTo-enabled account and you don’t want to lose these customers.

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