CBA becomes the first Big Four bank to launch PayTo payments

CBA has become the first major Australian bank to enable PayTo payments for its payer customers and to trial its capabilities for its business customers.

PayTo is a new digital way to authorise payments from a CBA bank account and the latest initiative from New Payments Platform Australia (NPPA).

“PayTo has the potential to revolutionise payments in Australia,” says CBA executive general manager payments, Ethan Teas.

“Innovation is at the core of what we’re doing to support Australians to pay and to get paid and PayTo could set the foundations for significant innovation across Australia’s payments system.”

PayTo will allow eligible CBA customers to manage one-off or recurring new PayTo payment agreements within the security of the CommBank App and NetBank. They will have the ability to view, authorise, pause or cancel payment agreements.

PayTo helps provide more control over payments that come directly from CBA customers’ bank accounts, including for regular bills, subscriptions and one-off payments. It may also reduce fraud, as each new digital PayTo payment agreement is authorised through secure banking platforms such as the CommBank App and NetBank.

In another first for a major Australian bank, CBA has also completed a successful PayTo trial with two business customers, Telstra and The Shepherd Centre, in partnership with Paypa Plane, a digital payments provider, delivering a debit solution using digital payment agreements established between the merchant and their customers.

Telstra used PayTo to create a payment agreement to enable a customer to make a bill payment, and The Shepherd Centre – a disability service provider for children with hearing loss – used PayTo to create a payment agreement to enable a donor to donate.

As PayTo for payee CBA business customers is in the trial phase, it is not currently widely available. CBA plans to expand the trial with Telstra, The Shepherd Centre and additional select CBA business customers who meet CBA’s eligibility requirements.

When PayTo is fully launched, eligible CBA business customers will be able to establish PayTo payment agreements as an alternative to direct debit arrangements as well as third-party initiated payments like salary disbursements. CBA business customers may also be able to accept PayTo payments in eCommerce environments as an alternative to credit and debit card payments.

PayTo could also reduce the costs and delays associated with failed payments for CBA business customers, as well as improve cash flow and reconciliation. That’s because digital PayTo payment agreements allow for near real-time payment processing, contain more information and data than traditional direct debits and require payer customers to authorise the PayTo payment agreement.

PayTo was due to be launched by July, but some of the big banks weren’t ready in time and were given a nine-month reprieve by the Reserve Bank. They now must be ready for launch by no later than April 2023.