PayTo for business: should you collect payments this way instead of direct debit?

If you bill the same customers every week or month, you’ve probably wondered whether PayTo should replace your direct debit. The short version: use it where it clearly helps, don’t rush a full migration, and judge it by what it does to your cash flow rather than by the hype.

This guide is part of our getting paid faster series. Faster, more certain receipts don’t just ease the week. They also shape the bank data a lender reads when you need finance in a hurry.

What is PayTo, in plain terms?

PayTo is a payment agreement, not a card and not a form. The steps:

1. You (or your payment provider) create an agreement for a customer.
2. The customer sees it in their own banking app and approves it.
3. You then collect under that agreement, and the money moves in real time.

The customer can see, pause or cancel the agreement in their bank. That visibility is the main difference from a traditional direct debit authority sitting in your records.

PayTo vs direct debit: what actually changes?

	Direct debit (BECS)	PayTo
Customer approval	Signed authority held by you	Approved in the customer’s own bank
Speed of funds	Batch processed, can take days	Real time
Failure notice	Can take up to three working days, according to payment providers	Usually immediate
Customer control	Ask you, or their bank	Pause or cancel in their banking app
Maturity	Established, near-universal	Newer, bank and provider support varies

The failure-notice row is the one that matters to cash flow. If a customer’s account is short, you’d rather know today than on Thursday.

Is direct debit being switched off?

Not on any date you can plan around. This is where a lot of older articles are out of date.

• In 2023, AusPayNet planned to decommission BECS by 2030.
• In December 2025 it removed that target end date, pending a clear roadmap for account-to-account payments (RBA review).
• In March 2026 the RBA said the nearer-term risk of a disorderly transition had “largely subsided”, but flagged “insufficient consensus within industry” on modernising account-to-account payments, especially bulk payments, and said it would take further action if industry can’t make coordinated progress (RBA media release).

What that means for you: direct debit keeps working, and some banks and providers are already shifting customers towards newer rails, so expect notices from your own bank. But nothing in the public record says you must move by a given year. Move when it helps, not because of a deadline that no longer exists.

When does PayTo make sense for your business?

PayTo tends to earn its place when:

• You bill the same customer repeatedly (memberships, retainers, subscriptions, rentals, maintenance contracts).
• Failed collections hurt because you pay staff or suppliers soon after the debit date.
• You’re onboarding new customers anyway, so there’s no old direct debit form to replace.
• Customers are consumers or small businesses comfortable approving something in their banking app.

It’s less compelling if your payments are one-off, if your customers are large organisations that pay by remittance run, or if your current provider doesn’t support it yet. Check what your accounting software or payment provider offers before you price anything. Fees vary by provider, so ask for them in writing.

How do you set it up?

Most businesses don’t connect to PayTo directly. The practical route:

1. Ask your payment provider or billing software whether they support PayTo agreements for merchants.
2. Collect the customer’s PayID, or BSB and account number, on your normal onboarding form.
3. Send the agreement request and tell the customer to expect a prompt in their banking app.
4. Set a fallback: if they don’t approve within a couple of days, use your existing invoice or direct debit route rather than leaving the account uncollected.

Some banks cap the size of a PayTo agreement or reject larger ones automatically, so check the limit with the customer’s bank before you propose a large recurring amount.

What are the limits and gotchas?

• Approval can stall. If the customer ignores the prompt, nothing is collected. Build a chase step.
• Bank support isn’t uniform. The customer’s bank has to support PayTo and display the agreement clearly.
• Mostly single payments. The RBA’s wider account-to-account review shows bulk payments are still being worked out, so don’t expect PayTo to replace a large pay-run or bulk collection file today.
• Cancellation is easier for the customer. That’s a feature for them. For you, it means watching for suspended or cancelled agreements and following up.

Does PayTo help when you apply for finance?

Lenders reading your bank data care about whether deposits arrive predictably and whether collections bounce. A business with fast, reliable receipts looks steadier month to month. Dishonoured debits are a red flag in an automated review; our guide to what an instant decline usually means lists dishonours among the common triggers.

PayTo isn’t a loan factor in itself. It’s one way to make your statement look like what it is: a business with regular customers who pay on time. If you share data through a bank-statement link, that steadiness is exactly what gets read.

An illustrative example

Illustrative only. A physio clinic in Geelong bills 120 patients on weekly payment plans by direct debit. About one in twenty debits fail, and the clinic learns of it days later, after the practitioner has already treated the patient the following week.

The owner turns on PayTo for new plans only. Failures for those patients surface the same day, so reception can message the patient before the next session. Over a few months, the clinic’s weekly deposits become steadier and the cash flow forecast needs less cushion. The old direct debit customers stay as they are until they renew.

That’s the model: add PayTo where it removes a known pain, and leave the rest alone. Review it after a quarter by comparing failed collections, days to cash and the time your team spends chasing before and after.

What questions should you ask your provider before switching?

A short list saves a lot of back-and-forth later:

• Which banks does it work with? If your customers bank with a smaller institution, confirm it supports PayTo agreements.
• What does a failed payment look like on your side? You want a clear status, a reason where one is available, and an easy way to retry.
• What happens when a customer cancels or suspends an agreement? Ask whether you get an alert or have to spot it yourself.
• Can you run PayTo alongside direct debit? Most businesses will for a long while, so reporting should show both in one place.
• How does it reconcile? Collections should land in your accounting software with the right customer attached, so your books match your bank feed. Clean reconciliation is also what makes a statement quick to read when you apply for finance.

What should you do this week?

1. Pull your last 90 days of failed or dishonoured collections and total them.
2. Ask your provider whether PayTo is supported, and what it would cost per agreement.
3. Pick one customer group to pilot, ideally new recurring customers.
4. Add the expected timing to your 13-week cash flow forecast.
5. Pair it with e-invoicing for customers who pay by invoice.

If a gap shows up between money going out and money coming in, that’s a good moment to see what finance is realistic. Our working capital hub covers the common options, and see if you qualify takes about a minute.

Receipts sorted? Plan the gap that’s left

Even tidy collections leave a gap now and then: a big order to fund, a quiet month, a tax bill that lands before a customer pays. We’d rather you know your options before you need them than scramble when something lands.

Enquiring takes about 60 seconds, and there’s no credit check when you enquire, so your credit file isn’t touched just for asking. We don’t send your details to a pile of lenders either; your phone won’t turn into a call centre. A real person reads your situation, then calls you with the pathway that fits.

One request: fill the form in accurately, including turnover, time trading and roughly what you need, so we can match the right option first time. To see how ready your file already is, try the Speed Readiness Check or read what still takes time in a loan.

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