EFT, BPAY, and Payment Methods in AP

Accounts payable payments in Australia are made through several payment methods, each with different processing times, cost profiles, and use cases. The most common are Electronic Funds Transfer (EFT), BPAY, Real-Time Gross Settlement (RTGS), and the New Payments Platform (NPP/PayTo). Paper cheques, once dominant, are now largely obsolete in business-to-business contexts. Understanding the differences between payment methods is relevant for AP teams because method selection affects payment timing, transaction costs, and the evidence available for payment reconciliation.

Electronic Funds Transfer (EFT) via the Australian direct credit system is the workhorse of AP batch payments. EFT payments are processed as an ABA (Australian Banking Association) file generated by the accounting system or AP platform, uploaded to the business's bank, and processed overnight in a batch clearing cycle. Payment is typically credited to the recipient's account the next business day, though same-day processing is available on some banking platforms. EFT is low cost (typically free or a nominal per-transaction fee through business banking), supports batch processing of many payments in a single file, and integrates directly with accounting system payment run functionality.

BPAY

BPAY is a bill payment system that uses a biller code and customer reference number (CRN) to direct payments to specific suppliers. It is most commonly used for utility bills, insurance premiums, and local government rates -- suppliers who use BPAY infrastructure rather than direct EFT. BPAY payments can be made through internet banking or through BPAY-compatible accounting software. They are processed overnight in the same batch clearing system as EFT but are directed by the biller code and CRN rather than by BSB and account number. For AP teams, BPAY payments require capturing the correct biller code and CRN from the invoice and entering them accurately -- a single digit error in the CRN will typically result in payment being applied to a different customer account.

NPP and PayTo

The New Payments Platform (NPP) enables near real-time payment between Australian bank accounts. PayTo is the NPP's mechanism for pre-authorised recurring payment arrangements -- a supplier can request authority to debit the buying business's account on an agreed schedule, which the business approves through its banking platform. Once authorised, PayTo payments proceed automatically without the AP team needing to generate a payment file for each cycle. This is well-suited to recurring, predictable supplier obligations where the payment amount and timing are agreed in advance.

RTGS (Real-Time Gross Settlement) is the payment method for high-value, time-critical payments -- typically above AU$500,000 -- where immediate settlement is required rather than next-day clearing. RTGS payments are processed individually and settled immediately through the Reserve Bank's payment system. They are more expensive than EFT and are used selectively for critical payments where delay risk is unacceptable.