PayTo for Recurring Payments

PayTo is a cutting-edge digital solution in Australia for managing recurring payments. Built on the New Payments Platform (NPP), PayTo offers a secure, real-time account-to-account payment mechanism, giving businesses a modern alternative to traditional payment processes. PayTo’s architecture and integration capabilities make it ideal for handling recurring payments, subscriptions, and other pre-authorised transactions.

Milestone: Australia’s First PayTo Transaction

Hello Clever pioneered PayTo in Australia, facilitating the first-ever PayTo transaction with BuyMobile in partnership with Commonwealth Bank. This historic transaction highlights Hello Clever’s role in shaping the future of real-time payments in Australia. As reported by IT News:

"BuyMobile, an online electronics retailer, has conducted the country’s first PayTo transaction with payments provider Hello Clever and Commonwealth Bank."

Customer Experience with PayTo

One of the standout features of PayTo is the improved customer experience it offers for recurring payments. PayTo provides customers with a high level of transparency, control, and security, making them feel confident and informed about each transaction.

Key Aspects of the PayTo Customer Experience

1. Clear Authorisation Process

   • With PayTo, customers authorise payment agreements directly within their online banking app. This upfront authorisation ensures customers are fully aware of payment terms, amount, and frequency before agreeing.
   • The familiar banking interface makes the authorisation process easy and trustworthy.

2. Full Transparency and Visibility

   • Customers can view all active PayTo agreements in real-time through their banking app, building trust and reducing payment-related anxiety.
   • Notifications for updates or changes to agreements ensure customers are always informed about their ongoing transactions.

Did You Know?

With PayTo, customers have full control over payment agreements, allowing them to pause, modify, or cancel payments directly from their banking app.

3. Flexible Control Over Payments

   • PayTo gives customers the ability to pause, modify, or cancel payment agreements in their banking app without contacting the business.
   • This flexibility fosters satisfaction, as users feel in control of their payment arrangements.

4. Enhanced Security

   • PayTo’s secure management through the banking app offers peace of mind, knowing each transaction is authorised and managed by the customer’s bank.

Technical Overview of PayTo

PayTo is an API-based, NPP-supported service designed to initiate authorised payments directly from a customer’s bank account. Unlike traditional methods, PayTo enables businesses to obtain upfront approval for recurring or scheduled payments, providing a seamless, transparent experience for both parties.

Key Components and Workflow of PayTo

1. Customer Authorisation
   • The process begins with the business setting up a PayTo agreement that the customer must authorise. This agreement outlines the terms, frequency, and amount for the recurring payment.
   • Customers authorise the agreement within their online banking app or web banking portal, ensuring a secure process where customers have full visibility of the payment terms before any funds are debited.

MORE TRANSPARENCY

Once authorised, PayTo agreements are securely stored within the customer’s banking app, ensuring they have continuous access and control over each transaction.

2. Initiation via API

   • Once the customer has authorised the PayTo agreement, the business can initiate transactions directly from the customer’s account according to the agreed schedule.
   • PayTo transactions are initiated through secure API calls that communicate with the NPP infrastructure, ensuring that each payment request is routed securely and processed in real time.

3. Real-Time Payment Processing

   • The PayTo transaction is processed instantly on the NPP infrastructure, providing real-time settlement. This means funds are available to the business immediately upon payment initiation, enhancing cash flow efficiency.
   • The NPP’s architecture is designed for high-frequency, high-volume processing, ensuring that payments are not only fast but also scalable for large transaction volumes.

4. Automated Notifications and Management

   • PayTo agreements are stored and managed within the customer’s banking app, where they can review and adjust the agreement as needed. Any modifications, such as updates to the amount or frequency, are automatically reflected in the business’s system via the PayTo API.
   • Notifications are sent to both the business and customer upon any changes, providing clear and consistent communication.

Shared Responsibility in PayTo Transactions

The PayTo service operates within a framework involving Hello Clever as the payment provider, sponsoring banks (e.g., Cuscal and ASL), and commercial banks (e.g., CommBank, ANZ, Westpac). Each entity contributes to the security, processing, and management of PayTo transactions.

Roles and Responsibilities

1. Hello Clever (Payment Provider)

   • As the payment provider, Hello Clever enables businesses to establish and manage PayTo agreements, handling the integration with the NPP to facilitate seamless transaction processing.
   • Hello Clever’s platform securely routes payment requests through the NPP, ensuring that transactions are initiated in real time and that data integrity is maintained throughout the process.

2. Sponsoring Banks (Cuscal, ASL)

   • Sponsoring banks, such as Cuscal and Australian Settlements Limited (ASL), provide essential access to the NPP for smaller financial institutions that may not directly connect to the platform. This allows a broader range of banks to offer PayTo to their customers.
   • These sponsoring banks act as intermediaries, ensuring that transactions are secure and compliant with industry standards while facilitating data exchange within the NPP network.

3. Commercial Banks (CommBank, ANZ, Westpac, etc.)

   • Commercial banks hold customer accounts linked to PayTo agreements and are responsible for authorising, debiting, and clearing funds based on the pre-set payment schedule.
   • These banks manage the PayTo agreements within their banking apps, providing customers with visibility and control, allowing them to view, modify, or cancel agreements as necessary.

Comparison: PayID vs. PayTo

Both PayID and PayTo leverage Australia’s NPP infrastructure but serve different purposes and use cases. Here’s a quick comparison:

Feature	PayID	PayTo
Primary Use	Simple, one-time payments, especially P2P and C2B transfers	Recurring payments and scheduled transactions requiring authorisation
Customer Control	Limited; primarily used to initiate direct payments	Full visibility and control over recurring payments in banking app
Transaction Type	Typically single, one-off payments	Suitable for ongoing agreements and subscription-style payments
Authorisation Process	No formal agreement; direct transfer between accounts	Requires customer authorisation for each agreement via online banking
Ideal For	Small businesses, P2P payments, one-time C2B transactions	Recurring payments, subscriptions, regular bill payments
Settlement Speed	Real-time settlement, with instant fund availability	Real-time settlement, ensuring funds are available instantly
Customer Experience	Simple and fast; customers only need a mobile number, email, or PayID	Greater control; customers manage agreements through online banking

PayID is perfect for one-time payments where simplicity and speed are key, while PayTo is better suited for recurring payments needing customer authorisation, like subscriptions and bill payments.