PayTo Struggles to Replace BECS
The Reserve Bank of Australia (RBA) recently stated that PayTo, a secondary Account to Account payments system linked to the New Payments Platform (NPP), has not yet become mature enough to effectively replace the Bulk Electronic Clearing System (BECS) as a direct debit system. This was revealed in a Risk Assessment on the potential Decommissioning of BECS. For the full report, click Here.
PayTo’s Role in Modern Banking
As a modern alternative to BECS, PayTo has been designed to give payers more control over their recurring payments and payee businesses an increased capacity for data handling and quicker settlement. Despite the growth in the usage of PayTo in 2025, the RBA noted that this was primarily due to new payment agreements rather than a shift from existing direct debits.
Challenges in Adopting PayTo
Currently, the majority of account-based pull payments in Australia are still processed using BECS. Several factors persist that inhibit the adoption of PayTo. Banks’ service gaps and variability, along with concerns about managing fraud risks among participants, are some of the challenges that need to be addressed. Australian Payments Plus (AP+) and NPP participants are actively working to overcome these issues.
Addressing Barriers to PayTo’s Adoption
Strategies to address these barriers include the development of standardized customer experience frameworks and managing fraud risks. However, the RBA stated that more work is needed to reach a consensus on how to deal with the remaining barriers. As of now, PayTo only supports single direct debit transfers. AP+ is exploring the idea of developing a bulk payment initiation capability to support direct debit use cases (bulk PayTo). Other functionalities such as the ability for payers to shift PayTo payments between their accounts have yet to be developed.
Comparing NPP and BECS
The Risk Assessment also provided insights into the progress of the NPP compared with BECS-reachable accounts. A significant challenge in replacing the BECS framework is ensuring that all BECS-reachable accounts are capable of sending and receiving payments using alternative payment methods. If payments cannot be reliably made to all intended payees via alternatives like the NPP, payers will not be able to move away from BECS.
Remaining Challenges and Future Plans
The Payments System Board has emphasized the importance of financial institutions continuing to work towards making their accounts reachable by the NPP. However, there has been little progress in connecting BECS-reachable accounts to the NPP over the past year. AP+ and NPP participants aim to connect an additional 8 per cent of accounts in the future, while roughly 3 per cent of accounts are expected to remain unconnected to the NPP.
