Real-time payments are coming in for landing in Australia

There was a time when payments happened at the speed of post, by putting a cheque in the mail.

Business travellers collected paper invoices, or used pre-negotiated trade credit arrangements, when paying for accommodation. Other expenses were typically paid in cash, with receipts presented for reimbursement from petty cash or payroll.

Debit cards for business bank accounts – and corporate charge cards – were game changers for business payments.

Then in 2003, the Reserve Bank of Australia (RBA) permitted card surcharging as part of a broader set of reforms.

From there, the Australian payments landscape got a whole lot more complicated.

Along the way, an internet payment method called POLi arrived in 2006, then departed in 2023, and PayID took the jump seat.

Now in 2025, it’s time to file a new flight plan, because PayTo has entered the gate. And PayTo is not just ready for takeoff… it’s coming in for landing.

Let’s navigate what PayTo means for the future of payments in the airline and travel industry in Australia.

How do Australian consumers respond to card surcharges?

In July 2025, the RBA released a 137-page document containing a review of surcharging and the card payment processing costs paid by merchants.

The RBA is currently consulting on proposed changes to the surcharging regime.

Many consumers dislike card surcharges and actively take steps to avoid paying them.

In 2022, around 45% of consumers said they would choose a non-surcharged method when faced with a surcharge, and 20% said they would avoid shopping at a merchant that levies a surcharge (source: Reserve Bank of Australia).

The RBA’s view is that surcharging has helped to put downward pressure on merchant service fees, particularly for charge cards, which are not subject to Australia’s interchange regulation rules.

In total, there are 12 payment systems subject to the surcharging framework.

• The RBA has designated eight card schemes covered by surcharging standards: Visa (credit, debit, prepaid), Mastercard (credit, debit, prepaid) and eftpos (debit, prepaid)
• The RBA also has undertakings from American Express, Diners Club and UnionPay that permit merchants to apply surcharges
• PayPal revised its User Agreements in 2016 to allow merchants to surcharge PayPal transactions

If a surcharge-free method of payment is not provided, then retailers must include the minimum surcharge in the total single figure price displayed for any product. This is required by Australia’s federal competition law to avoid consumers being misled.

For purchases in the hundreds or thousands of dollars – like air travel – there is a strong commercial incentive to show the customer the price without any surcharge. This requires a ‘free’ method of payment to be provided at checkout.

In the past, that ‘free’ method of payment was POLi. Since 2023 it’s been PayID, although increasingly the conversations Volt is having with airlines in Australia are focused on PayTo.

What’s going on with card processing costs?

The RBA says fees charged to Australian merchants to accept cards are “opaque and complex”.

For example, there is a disparity between debit and credit card transactions, and also between large merchants and small-to-medium businesses (SMBs) due the difference in negotiating power.

Australian SMBs – the proverbial “backbone” of our nation’s economy – pay a whopping A$4.5 billion a year in card payment processing costs.

As we wrote in How much are card fees: A complete guide to processing costs, there are multiple players in the journey of accepting, approving and processing a card payment:

• cardholder
• merchant
• merchant acquirer
• card issuer
• card schemes/networks

If one step fails, so too does the transaction.

Below is how the card payment journey looks from end to end:

The transaction can fail at any of the above touchpoints.

Why are real-time payments coming in for landing in Australia?

Recently, I was booking corporate travel to attend the CAPA Airline Leader Summit 2025 for Australia Pacific on 31 July and 1 August 2025 in Cairns. Volt was proud to be an event sponsor and I delivered a short presentation on the main stage on the topic of payments.

When I got to the airline’s online checkout, there were six options for me to navigate, with surcharging ranging from 0% to 2%.

One of those options was the non-surcharged real-time payment option in Australia called PayID. This is an account-to-account payment method where a proxy address is used to direct the passenger’s bank transfer, rather than the BSB and account number, but it’s still a manual payment.

That’s the payment method I chose on this occasion.

However, I would have been happier to see PayTo presented at checkout, as this option enables a ‘one-click payment’ to improve customer experience and potentially reward returning customers for their loyalty.

What is PayTo and how has Volt integrated it?

PayTo is a real-time payment system developed by Australia’s New Payments Platform (NPP) in 2022. It enables consumers to initiate account-to-account payments to merchants, thus bypassing cards, and avoiding having to pay a surcharge.

Volt’s integration of PayTo was the first to offer consumers a one-click checkout experience – a key point of difference in the Australian payments market.

PayTo also facilitates subscriptions and recurring payments. It is essential infrastructure supporting Australia’s transition away from BECS, the bulk electronic clearing system for batch processing of payments, which is being phased out by 2030.

Volt has already set up PayTo for Motorhome Republic, part of the ASX-quoted Webjet Group.

Motorhome Republic is one of the world’s largest motorhome and campervan rental agencies. It operates out of New Zealand and has vehicle pick up locations in over 45 countries, with a particularly strong market presence in Australia, where it has now integrated Volt via payment infrastructure provider Optty.

As I said in June when we announced this news, it’s fantastic to see such a highly regarded enterprise travel brand – the sixth in our merchant portfolio – realise not only the benefits of PayTo, but Volt’s specific integration of what has already become a serious challenger to cards.

Where’s POLi?

POLi closed down on 30 September 2023. This was announced by Australia Post in July of that same year.

Since 2006, the POLi ‘internet banking’ service had been supported by large merchants, particularly those in the travel industry, who benefitted from near-instant settlement when customers made online purchases.

However, the underlying mechanism relied on something known as ‘screen scraping’, which requires the user to share online banking credentials. The introduction by banks of increased security measures against fraud meant that POLi’s technology was tired.

Additionally, POLI’s business case was struggling, because PayID had been progressively embedded in the digital platforms of Australian banks since 2018, and PayTo was just about to take off.

POLi’s sudden closure in 2023 triggered concern in the air travel industry.

It had been providing a bespoke payments solution for processing airfare transactions across disparate systems operated by travel agents, airlines and online booking services. And it was presented to the passenger as a ‘free’ payment option, meaning that surcharged prices did not have to be displayed.

The question still remains for many airlines: Where’s POLi?

Today’s answer for the airline and travel industry is PayTo.

How PayTo addresses POLi’s limitations

PayTo addresses several fundamental limitations of its predecessor, offering a more secure, efficient, and user-friendly payment solution:

• Improved security. With PayTo, users authorise payments directly through their banking apps, without having to share banking credentials with third parties, which reduces the risk of fraud
• Real-time payments. PayTo was built on the NPP infrastructure to provide real-time payment confirmations, ensuring swift and secure transactions for both consumers and merchants
• Consistent user experience. POLi’s experience could vary, depending on the bank and the specific integration used. With PayTo, users approve payments within their bank app after checkout, for a uniform and more streamlined process
• Centralised architecture. PayTo integrates all banks into a single platform, while POLi involved direct integrations with individual banks
• Recurring and mandate-based payments. PayTo supports these types of payments, allowing users to authorise recurring and variable payments directly within their bank apps. This functionality is built-in and more advanced compared to POLi, which relied on banks improving their APIs to offer similar capabilities
• Wider bank support. A step-change from POLi’s limited acceptance, PayTo is supported by all major Australian banks as part of the NPP, which ensures broad compatibility and accessibility
• Industry backing. PayTo is backed by the NPP. POLi lacked similar industry backing

With issues like fraud, chargebacks and slow settlements ever present with card payments, both merchants and consumers will only benefit from the unrivalled capabilities that come with PayTo’s real-time payments.

Find out more about PayTo by watching our video or reach out to us to book a demo.