Red Energy has become the first major energy retailer to embed the New Payments Platform’s (NPP’s) next-gen direct debit capability, PayTo.

PayTo is now live for one-off bill payments and refunds for customers of the energy retailer, which number more than one million individuals across Australia.

Red Energy said it also plans to expand the service to include recurring payments and solar rebate payments, as well as integration into its mobile app.

PayTo, which effectively supersedes direct debit payments run through the legacy Bulk Electronic Clearing System (BECS), enables businesses to initiate payments from customers’ bank accounts, with settlements confirmed in real-time.

BECS, which has been in operation for nearly four decades, is mooted for decommissioning by 2030, with all account-to-account payments to be migrated to the NPP network before this time.

Red Energy said it actively sought to be on the front foot of this migration.

PayTo ‘agreements’ set debiting terms between payee businesses and payer customers, including payment amount, frequency and duration. These agreements can be viewed and confirmed by customers via their banking apps or internet banking services.

“Once the customer authorises the Red Energy PayTo agreement, bill payments can be processed instantly, directly from the bank account,” Red Energy noted.

A key feature of PayTo agreements is their promise of reducing fraud out-of-the-box, with agreements authorised within the trusted environment of a customer’s internet or mobile banking app.

Red Energy partnered with payments technology developer and PayTo specialist Zepto to enable its new payments capability.

Zepto is Australia’s first non-ADI directly connected to the NPP for PayTo. Its API-backed infrastructure processes around $50 billion of account-to-account payments each year.

Red Energy’s retail financial controller Anthony Young welcomed the partnership with Zepto, noting benefits for customer experience and payments security.

“The ability to interact with our customers in real-time was a big driver for us in adopting PayTo early. At the same time, PayTo provides a single touch point for customers in their banking app, giving them comfort and control over their bill payments.”

He added: “The launch of PayTo is an important step in our digital transformation strategy as it helps us future-proof our payment systems.

“As we move towards a world where everything, including payments, is managed through the device in our pocket and legacy systems like BECS begin to phase out, we see the New Payments Platform and partners like Zepto as integral to the future of payments—and we’re excited to be the first utility provider to offer PayTo to its customers.”