Australian Big Four bank NAB is partnering with Banked to launch Pay by Bank capabilities, leveraging Australian open banking rails PayTo to settle near-instant transactions.
Pay by Bank capability will enable merchants to avoid costly card surcharges by sending PayTo Agreements to their customers to initiate payments and refunds directly from their banking app. The roll out addresses a range of scenarios for merchants such as online payments, scheduled recurring payments with fixed or variable amounts, and split payments.
Shane Conway, NAB executive transaction banking and enterprise solutions, says: "A2A payments are growing and enabling merchants to receive payments directly from their customers’ bank accounts, bringing compelling benefits for certain use cases.
"As Australia continues to face economic headwinds, we believe this technology will offer an economic benefit for merchants - in particular retailers - including lowering the cost of doing business, enabling differentiated customer loyalty schemes and helping mitigating scams and fraud risk. It’s a win-win.”
The first set of NAB business customers are expected to go live with A2A payments in the first half of 2024 and represent a range of industries spanning e-commerce, retail and non-bank lenders.
The news follows NAB Ventures’ participation in Banked’s series A funding round extension, contributing to an additional $15 million investment alongside Citi Ventures and Insight Partners.
Brad Goodall, CEO of Banked, states: "The nascent A2A payments industry in Australia presents an incredible opportunity for Banked. Local regulators have developed well-constructed mandates and the banking industry is primed for innovation, all of which sets the stage for rapid growth in real-time payments."