Why PayTo Payments Are About to Take Off

After 20 years in the payments industry, I’ve seen plenty of technologies that promised to ‘change the game’. Some have lived up to the hype. But many, many more have fizzled out.

It’s easy to see why that makes people sceptical of new tech in the finance space. But PayTo, the latest digital and mandated way for merchants to initiate real-time payments from customer bank accounts, is completely different to the old stories we’ve heard. It’s not just another payment option; it’s a smarter, faster, and more reliable way to pay – and while some might think its widespread use is still years away, the reality is that PayTo is already gathering momentum. Here are three reasons why we’re on the verge of a PayTo revolution.

Big Names Are Getting On Board

In the past few months, we’ve seen brands like Red Energy and investment platform Stake roll out PayTo, as well as Woolworths last year, and Chemist Warehouse are even trialing using PayTo at checkout to help reduce card costs. Personally, I’m a little sceptical of the in-store use case as we know retailers like supermarkets and pharmacies are optimised for speed.

Prior to this point of adoption, mostly smaller businesses had been experimenting with PayTo. Now, we are seeing more and more household names that see the technology’s value for both them and their customers. Plus, those that adopt the tech now are getting ahead of the regulated end to Direct Debit in 5 year’s time. 

These businesses are adopting PayTo to solve real problems. Bank payments are in most cases cheaper than other payment methods like credit cards while providing a seamless experience for customers (supporting both onboarding and retention).

Still, widespread support won’t happen overnight. Onboarding new payment tech requires a reevaluation of processes, retooling systems and training teams. It’s as big as the move from cash to cards, and that’s why it’s important for businesses to think about it now. 

Real Results Are Starting to Show

PayTo benefits businesses because it simplifies how customers pay by eliminating unnecessary friction and the processing middleman. That means fewer barriers for new customers and a smoother experience for existing ones.

On the back end, it’s just as impactful: PayTo reduces manual processes with features such as automatic reconciliation and the ability to submit bulk payments as a batch or ABA file. It also cuts down on the rate of payment failures, something that 62 per cent of Australian business owners are interested in introducing new tech to do, according to our Pursuing Payments Report Fewer failures means happier customers, reduced churn and less time wasted chasing overdue invoices.

It’s Already Finding its Niche

While PayTo is making great strides, the one area I’m not sold on is in-store payments.

There’s been a lot of buzz about using QR-code-initiated PayTo experiences to replace cards at the checkout. Yes, PayTo could offer retailers a lower-cost alternative to card –but I’m sceptical that it’s the ideal fit for retail. Adding extra steps, like scanning a QR code, doesn’t fit in a fast-paced retail environment where every second counts. Long queues and frustrated customers aren’t necessarily worth the cost savings.

Where PayTo is a natural fit, however, is in digital payments. Our focus has been on the digital experience, working PayTo seamlessly into online transactions and recurring payments. That is where it will have the greatest impact over the next few years, and where there’s plenty of room for accelerating adoption.

What’s Next?

The Reserve Bank of Australia has set a deadline for payment modernisation by 2030 and PayTo is already on the radar for most businesses. If you have a recurring revenue model, chances are you’ve at least started thinking about how to incorporate it.

The real shift will come when PayTo becomes the consumer’s preferred way to pay. Once that happens and demand grows, its adoption will snowball. From there, we’ll see more businesses onboarding and within a short time, the entire Aussie payments landscape will look very different.

In short: the tipping point is much closer than people think.

Businesses that take action now and invest in PayTo won’t just gain a competitive edge in the interim, they will be the ones to benefit the most when it hits scale.

Luke Fossett is General Manager, Australia and New Zealand, at GoCardless.

Last Updated on March 26, 2025 by Luke Fossett