Australian Big Four bank NAB is partnering with Banked to introduce Pay by Bank capabilities, utilizing the Australian open banking infrastructure known as PayTo for near-instant transaction settlements.
This new Pay by Bank feature will allow merchants to bypass expensive card surcharges by sending PayTo Agreements directly to customers, enabling them to initiate payments and refunds through their banking apps. The rollout aims to address various merchant scenarios, including online payments, scheduled recurring payments (both fixed and variable amounts), and split payments.
Shane Conway, NAB’s executive for transaction banking and enterprise solutions, stated, “A2A payments are growing and allowing merchants to receive payments directly from their customers’ bank accounts, which brings significant advantages for specific use cases.”
He added, “As Australia navigates economic challenges, we believe this technology will benefit merchants—especially retailers—by reducing operational costs, enabling unique customer loyalty programs, and helping to combat scams and fraud risk. It’s a win-win.”
The initial group of NAB business customers is expected to start using A2A payments in the first half of 2024, covering a diverse range of industries, including e-commerce, retail, and non-bank lenders.
This development follows NAB Ventures’ involvement in Banked’s series A funding round extension, contributing an additional $15 million investment alongside Citi Ventures and Insight Partners.
Brad Goodall, CEO of Banked, remarked, “The emerging A2A payments industry in Australia represents a tremendous opportunity for Banked. Local regulators have established well-designed mandates, and the banking sector is ready for innovation, setting the stage for rapid growth in real-time payments.”