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PayTo and Direct Debit – What Are the Differences?

  • January 31, 2024   ⎯   mins read
A smiling woman holds a credit card and her smartphone.

Direct debit has been making consumers' lives easier since the 1960s and remains a popular, efficient and cost-effective method of invoicing customers.  

Recently, there's been a push to modernise the core processes behind direct debit, dragging its 1960s sensibilities into the 21st century.  

Enter PayTo - a modern alternative to direct debit, which gives both Australian businesses and consumers far more visibility and control over their financial and billing needs.  


What is PayTo?  

PayTo isn't a simple drop-in replacement for direct debit – at least, not yet. Think of PayTo as a modernisation of direct debit. Eventually, PayTo will entirely replace the Bulk Electronic Clearing System (or BECS).  

PayTo adds additional features to direct debit that make managing payment plans easier for businesses and customers alike. These features can help improve payment collection rates, minimise processing time, and maximise customer experience.  

Here is a snapshot of what makes PayTo better than traditional direct debit.  


4 Core Differences Between PayTo and Direct Debit 


1. Faster Payments 

Traditional direct debit can take 2-3 days for funds to clear. While this isn't ideal for most businesses, it's also frustrating for customers who have no guarantee that their payments have gone through.  

Instead, PayTo makes direct debit an instantaneous process - for all kinds of payments, including one-off, ad-hoc and subscriptions. Businesses are notified instantly of failed payments instead of 2-3 days later, giving them more time to contact their customers for a resolution. 


2. Easier Set-Up 

Instead of relying on traditional paper direct debit request forms, PayTo allows businesses to enter a payment agreement with customers through their internet or mobile banking portal.  

Customers can manage all their direct debit agreements inside their banking app, which gives them far greater flexibility and freedom around their finances. They can also choose to pause payments, pay from a different account or cancel their payments.   


3. Better Relationships with Customers 

Traditional direct debit payments require businesses to manually track and manage numerous direct debit agreements with their customers. As businesses grow, so do the number of direct debit agreements.  

Additionally, customers are expected to manually contact support staff to cancel or pause their direct debits or change essential details. All these processes and procedures can represent an enormous time sink for companies.  

With PayTo, businesses receive any changes to the PayTo agreement as notifications. This gives them more time to check in with their customers and understand why their customers have chosen to pause or cancel their PayTo agreement.


4. More Secure 

To make a PayTo agreement with a business, customers must log into their internet or mobile banking app, confirm confidential banking information and agree to the payment.  

This additional layer of security significantly reduces the chances of fraudulent transactions, dishonours, and disputes - as customers must pass through several levels of verification to set up a PayTo agreement. Businesses can continue billing, safe in the knowledge that their customer is who they say they are.  


How do I get PayTo? 

For over 50 years, direct debit has been offering customers and companies alike a simple and convenient way to settle their invoices. However, like all other technology in its 57th year of life, it’s important to move with the times and innovate.  

PayTo is now available for banks and payment service providers like Ezypay. If you're looking for someone who can help you incorporate PayTo into your business or want to learn more - get in touch 

 Moving your direct debits to PayTo is the right choice.  


Ready to offer PayTo to your customers? Get in touch 
Alternatively, call 1300 300 553 in Australia or email hello@ezypay.com.  

About direct debits Subscription Billing Recurring Payment Subscription Automation Switching Subscription Payment Providers Preventing late payments PayTo direct debits

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