Beyond Direct Debit: Rethinking Payment Collection for Support at Home
Written by Pete Williams, CTO Tyro Health at Tyro Payments
Following on from our last article, Direct Debit and Beyond: Rethinking Payment Collection for Support at Home, where we talked about how Direct Debit and its inefficiencies—especially around dishonours, delays, and compliance—are being increasingly difficult to justify in a digital-first environment, this article looks at modern alternatives and how aged care providers can future proof their payments strategy.
Given the challenges of traditional Direct Debit, many forward-thinking aged care providers and software vendors are exploring smarter, more efficient alternatives. These modern solutions offer real-time processing, enhanced visibility, and a better experience for both providers and care recipients.
Card on File (Credit/Debit Card Tokenisation)
Pros:
- Faster settlement—often next business day
Instant success/failure notification during processing
Increasingly preferred by care recipients for convenience
Cons:
- May incur higher transaction fees
- Requires ongoing card management (e.g. expiry tracking)
- Must meet PCI DSS compliance for secure data handling
BPay
Pros:
- Well-known and trusted brand in Australia
- Payments are initiated by the care recipient, reducing provider workload
Cons:
- Entirely reliant on care recipient action—prone to being forgotten
- Reconciliation can be difficult if reference numbers are missed
- Not suited for automated recurring payments
Manual Bank Transfer (EFT)
Pros:
- No direct transaction fees incurred by the provider
Cons:
- High administrative burden due to manual entry and matching
- Easy for recipients to enter incorrect references or amounts
- Difficult to automate or scale efficiently
PayTo (Account Debits via the NPP)
PayTo is a modern, real-time alternative to Direct Debit, powered by the New Payments Platform (NPP), Australia’s real time payments infrastructure. It enables care recipients to pre-authorise payments directly from their bank account, with full visibility and control.
PayTo is live and supported by most major Australian banks, with account enablement reaching near ubiquity. Merchant adoption and payer awareness is growing steadily—and the infrastructure is ready.
Key advantages:
- Instant payment initiation and confirmation
- Digital mandate creation and management—often handled conveniently via the payer’s own familiar banking app
- Performs upfront bank account validation during setup—reducing failure rates
- Richer payment data improves reconciliation
- Greater transparency and control for payers
What does it mean for aged care providers?
Card on File and PayTo aren’t just alternatives—they’re upgrades. Together, they offer:
- Better cash flow certainty
- Fewer failed payments
- Lower administrative effort
- A smoother, more modern experience for care recipients and their families
As the aged care sector faces growing demands and regulatory changes, now is the time to evolve your payment strategy and reduce friction across the board.
When reassessing your approach to care recipient contributions, it’s important to look beyond immediate functionality and consider long-term viability, operational efficiency, and client experience.
Some things to keep in mind:
- Direct Debit decommissioning: The Reserve Bank of Australia has signalled the decommissioning of the BECS system, including Direct Debits, targeted for 2030. This isn’t a distant possibility; it’s a strategic direction. Relying solely on Direct Debit is building on foundations scheduled for removal
- Reconciliation reality: Even successful Direct Debits require careful reconciliation against bank statements and care recipient ledgers, complicated by batch settlements and delays
- Cash flow blind spots: The inherent lag in Direct Debit settlement and the unpredictability of dishonours make precise short-term cash flow forecasting far more challenging compared to real-time methods like PayTo or Card on File.
- The true cost of Direct Debit: Look beyond per-transaction fees. Factor in the substantial ‘hidden’ costs: staff hours spent managing mandates, investigating and chasing dishonours, handling exceptions, and performing complex reconciliations
- Care recipient & family experience: Clunky paper forms, unexpected payment failures, and the resulting follow-up calls can negatively impact relationships. Offering modern, flexible, and transparent payment methods reflects professionalism and care—important qualities in aged care
- Integration & development lift: Implementing and maintaining robust Direct Debit processing (especially compliant mandate management and sophisticated exception handling) carries significant software development and ongoing operational costs. Evaluating the ROI of shifting development effort towards integrating PayTo and improving Card on File workflows is crucial for software vendors
- Enhanced security: Securely managing bank account details for Direct Debit is a major responsibility. PayTo offers a bank-mediated mandate process, reducing the burden on providers to store and manage this data directly enhancing compliance and reducing risk exposure.
Final thoughts
Direct Debit has long played a role in aged care, but its inefficiencies—especially around dishonours, delays, and compliance—are becoming increasingly difficult to justify in a digital-first environment. With the BECS system scheduled for decommissioning, it’s not a matter of if you need to modernise—but when.
Modern alternatives like Card on File and PayTo offer real-time processing, better payer visibility, reduced failure rates, and far less administrative burden. They’re not just payment options—they’re foundational tools for future-ready care.
To help providers navigate this transition, Tyro Health will seamlessly integrate with the Support at Home framework, enabling aged care providers to process Support at Home claims and manage participant contribution payments with ease. If you’re an aged care service provider or software developer interested in learning more about our integrated solution, please register your interest here.
Disclaimers
Tyro Health provides this article for general information and educational purposes and does not take into account the financial situation or need of any reader. The information provided must not be relied upon as legal, tax or financial advice.
