Australian payment fintech Zepto is aiming to push bank-account to bank-account transactions in the merchant space to compete with credit and debit cards, with its API ‘giving merchants the tools to own the process end-to-end themselves’.

Its product will use a new payment standard, PayTo, to integrate with online checkouts and allow people to purchase products using funds directly from their bank account. This means it can be achieved without needing a credit or debit card, or relying on third-party payment infrastructure, Zepto chief commercial officer, Carolyn Breeze (pictured) explains.

“It makes debit cards redundant. At the moment you need a debit card to secure the payment in real-time. Traditionally bank accounts took two to three days to get money. PayTo brings it to real-time,” Breeze says.

The pricing model does not suit microtransactions as well as larger purchases however, with Zepto currently finalising it’s pricing for the one-fee system.

“It’s a one-off transaction fee, but it will be potentially capped.

“If you think for example something purchased at $1,000 with a credit card,  the merchant can pay fees themselves or push them onto you. That’s usually between 1.5% to 3% of the total transaction amount. But for payments in the sub-$5 space, it’s not as efficient,” Breeze says.

PayTo can also be used in lieu of direct-debit transactions, or to set up recurring payments if you’re a retailer considering adding a service, or subscription model, Breeze says.

Zepto will use the New Payments Platform (NPP), and was recently accredited by the ACCC as an Accredited Data Recipient (ADR) under the ACCC’s Consumer Data Right (CDR). It says it is the first non-bank payments provider to achieve the accreditation.

Breeze says Zepto is already processing some $3bn worth of payments every month, but notes that the NPP, and PayTo, won’t be available until it is set to go live in June 2022.

Zepto was founded by Trevor Wistaff, Adrian Kennedy, Matthew Cheers and Ian Lennie after leaving their skydiving business in 2011, and trying to solve the payment problems they kept running into. In 2018, they launched what was then called Split Payments, changing the name to Zepto in 2021.