Visa optimizes account-to-account payments with A2A

Payment giant Visa has just unveiled its latest initiative, simply called A2A. Its objective is clear: to make account-to-account payment solutions more efficient by encouraging collaboration between market players. In this way, Visa is seeking to improve Open Banking payments and once again demonstrate its ambitions beyond the card.

FACTS

• Visa has just announced the launch of its “Account-to-Account” (A2A) payment service. It is presented as a variable recurring payment solution for making bill payments for utilities, rent and childcare, initially.
• Visa's launch of the A2A solution leverages the company's infrastructure to enable instant funds transfers between bank accounts, without the use of credit or debit cards.
• Several environments are particularly targeted by the device, such as e-commerce, business-to-business (B2B) payments, and person-to-person (P2P) transactions.
• In concrete terms, users will be able to set up direct debits directly on merchants' online stores or from their online banking space, with just a few clicks.
• The system is also presented as secure. In particular, a new button will be available on banking applications to enable A2A users to report any problems simply and quickly.
• The device has been designed in partnership with players such as Banked, Modulr, Moneyhub, Salt Edge, Vyne and Yaspa, as well as British banks.
• A2A will initially be launched in the UK in early 2025, then marketed in the Nordic region and elsewhere in Europe later in 2025.

CHALLENGES

• Optimize payment: A2A is presented as a direct account-to-account transfer solution, aimed at simplifying digital payments, offering a secure alternative to conventional transfers and direct debits (which require the sharing of bank details and personal information), while reducing the costs associated with traditional intermediaries.
• Combating automatic renewals: Visa highlights the benefits of A2A in combating automatic service renewals. While streaming services, gym memberships and packed lunches will not initially be covered by the service, Visa stresses that such deployment is planned for the future.
• Extending its influence: once again, Visa is demonstrating its ability to develop alternatives to traditional payments, moving beyond the card market to participate in the renewal of the payment market in general.
• Surfing a booming market: According to the Pay.UK organization's annual report, the account-to-account payment market accounted for £3.7 trillion in 2023 in the UK, up 15% on the previous year.

MARKET PERSPECTIVE

• Visa has been working on positioning itself in this market for several years, and in 2021 acquired Tink (in place of Plaid) to achieve this goal.
• This strategy is all the more legitimate given that the Payments Directive (PSD3) plans to harmonize the rules governing access to bank data to better protect consumers against fraud, while encouraging innovation and the development of new services.