Paynes Place runs off Little Bourke Street between Russell and Exhibition streets. The other end of the place connects to Croft Alley. The place was formerly known as Commercial Lane and Kytes Lane.
In July 1873, the Argus reported that Henrietta Nott and Esther Moss were found 'fighting like tigers' in the then Commercial Lane, which was strewn with the ladies' hair, 'while they were urged on and applauded by a crowd of larrikins'.
In September 1910, the property owners of Kytes Lane petitioned the Melbourne City Council to change the name to Paynes Place. The main reason for their request was to shed the image of brothels and gambling dens that had come to be associated with Kytes Lane. The owners noted that the dens has now been removed and replaced with substantial brick warehouses. Their efforts may have been premature, with the Argus reporting a raid on an opium den in the lane in December 1911.
Paynes Place was given its new name after John Payne of Payne's Bon Marche, located in Bourke Street. In 1920, Paynes Stables were located in Paynes Place. In 1930, there were two fruit merchants in the place.