For decades, Australian businesses have collected recurring payments using direct debit. PayTo is the modern replacement, built on the New Payments Platform (NPP). Both let you pull payments from a customer’s bank account on a schedule, but PayTo fixes the long-standing weak points of direct debit: slow batch processing, permissions held by the business rather than the customer, and little visibility for the customer. This page compares the two.
Both PayTo and direct debit are pull payments, where the business collects, rather than the customer sending. For the underlying idea, see push vs. pull payments.

​
The problems with traditional direct debit

Direct debit has worked for a long time, but it carries three main drawbacks:

Slow settlement

Payments are processed in batches and can take 1–3 business days to clear.

Permission held by the business

The customer signs an authorisation that the business keeps, so changing or cancelling it means contacting the business.

Little visibility

Customers often cannot easily see which direct debits are active on their account without checking statements.
PayTo addresses each of these.

​
Side-by-side comparison

​
Who holds the permission

This is the biggest difference. With direct debit, the business keeps the customer’s authorisation, so the customer has to get in touch to change or stop it. With PayTo, the customer’s bank holds the agreement, and the customer can view, pause, or cancel it themselves in their banking app at any time. That shift puts customers firmly in control.

​
Speed

Direct debit is processed in batches, so a payment can take one to three business days to clear. PayTo settles each payment in real time over the NPP, so the money is in your account in seconds, improving your cash flow and giving you an instant, accurate view of what has been collected.

​
Transparency and trust

Because a PayTo agreement is approved inside the customer’s banking app (showing your business name, the amount, the frequency, and the duration before they confirm), customers know exactly what they are agreeing to. That openness tends to reduce disputes and cancellations compared with a direct debit the customer may have forgotten about.
Hello Clever facilitated Australia’s first PayTo transaction, in partnership with Commonwealth Bank, an early milestone for real-time recurring payments in Australia.

​
Which should you use?

For most new recurring billing, PayTo is the better choice: faster settlement, happier customers, and less dispute handling. Direct debit may still suit businesses with established direct debit arrangements that are not ready to move, but PayTo is the direction the market is heading.

Learn how PayTo works

The full workflow, from creating an agreement to collecting each payment.

See the agreement fields

A field-by-field guide to configuring a PayTo agreement correctly.