Australian lender Plenti has become the first NAB business customer to integrate its ‘Pay by Bank’ capability – which leverages Australian Payments Plus’ (AP+’s) PayTo function – into its online lending platform.

Pay by Bank, co-developed by fintech Banked and NAB, enables merchants – in this case, Plenti – to send ‘PayTo agreements’ to their customers and initiate payments and refunds according to this PayTo agreement.

PayTo agreements function similarly (though with far more controls available to customers) to direct debit requests, effectively serving as a direct payment link between merchants and customers. These agreements can then be viewed and managed by customers through their bank or payments institution.

The Pay by Bank capability will enable Plenti customers to make real-time re-payments on their loans without manual entry, with account details and reference numbers already pre-linked and verified through the PayTo agreement.

PayTo, the account-to-account payment solution touted as a modern and superior alternative to direct debit payments, takes advantage of the New Payments Platform’s (NPP’s) fast payment rails, enabling real-time transfers and account-holder verification. Merchants, through PayTo, can also receive immediate notification of pauses, changes or cancellations of payment agreements, which the customer has full control over.

Uniquely, Pay by Bank also addresses a range of scenarios for merchants, such as the scheduling of recurring payments with fixed or variable amounts and the splitting of payment amounts.

While the capability is expected to be rolled out more widely by Plenti, for now, Pay by Bank will be limited to enabling customers to make extra loan payments – currently, NAB notes that around 10,000 extra loan payments are made by Plenti customers each month.

NAB executive transaction banking and enterprise payments, Shane Conway, boasts that Pay by Bank enables its business customers to improve cash flow, speed up reconciliation processes, reduce fraud risk and save money.

“The improved payment experience for consumers is also a key benefit for businesses enabling PayTo, which offers a faster, more secure and enhanced experience compared to other payment options such as direct debit,” Conway said.

“Our Pay by Bank solution has been designed to seamlessly integrate into various payment systems to make it easy for more businesses to unlock the benefits of real-time payments.