Digital payments giant Visa is set to debut ‘Visa A2A’ in the UK early next year, offering consumers an enhanced digital user experience, advanced security features, and an easy-to-use dispute resolution service that represents a significant upgrade to the existing pay-by-bank experience.
In 2023, A2A Faster Payments facilitated £3.7trillion worth of payments in the UK, a 15 per cent increase over the previous year. Despite this growth, paying bills and subscriptions through bank transfers has remained largely unchanged since the inception of direct debit 60 years ago.
Because of this, it can be difficult for consumers to manage their finances using a service designed in a pre-digital age that, in many cases, still requires manual processes and has outdated consumer safeguards.
This affects consumers, businesses and the wider UK economy. In fact, billions of pounds are lost or withheld from consumers due to problems such as unauthorised auto-renewals or the lack of flexibility around bill payments.
Aiming to address these issues, Visa has revealed plans to apply its infrastructure, technology and capabilities to account-to-account (A2A) payments, giving consumers more control over how they pay via bank transfers and aims to help people get their money back if something goes wrong.
Mandy Lamb, managing director of Visa UK and Ireland, said: “We want to bring pay-by-bank methods into the 21st century and give consumers choice, peace of mind and a digital experience they know and love. That’s why we are collaborating with UK banks and open banking players, bringing our technology and years of experience in the payment card market to create an open system for A2A payments to thrive.”
Benefitting consumers
From early next year, banks and businesses in the UK will be able to offer Visa A2A to consumers making bill payments such as utilities, rent and childcare fees. Visa explained it will eventually look to support consumers in better managing subscriptions of products and services including digital streaming, gym memberships and food boxes.
The digital payments giant will introduce a formal dispute resolution process to offer consumers a more reliable way to check transactions, while also implementing biometrics to add an enhanced level of security resulting in fewer unauthorised transactions.
Visa A2A will be based on an open system available for all eligible banks and other industry partners to join, and introduces standards, rules and a dispute management service to help protect consumers and further modernise open banking-based payments.
Designed in partnership with a number of UK fintechs, including Banked, Modulr, Moneyhub, Vyne and Yaspa, Visa A2A also benefits businesses, as near real-time settlement through Pay.UK’s Faster Payment System gives them greater visibility over payments and makes cash flow management simpler.
Dan Scholey, chief commercial officer at Moneyhub
Businesses can also take advantage of the digital nature of Visa A2A, including notifications if a consumer changes or cancels payment permissions, and it also provides them with the ability to include more transaction data for reconciliation.
Dan Scholey, chief commercial officer at Moneyhub, commented: “A2A payments are transforming the way the world pays, and Variable Recurring Payments (VRPs) will play a central role in that shift.
“We believe Moneyhub’s unique suite of tools and experience transforming data into personalised digital experiences, combined with Visa’s expertise in operating payments systems at scale, will accelerate the delivery of commercial VRPs to our customers.”
A2A support remains strong
Rob Levy, director of POS lending products, open banking and digital platforms at Barclays
“We are supportive of initiatives that drive competition and innovation in A2A payments, and an industry-led scheme solution is one of the many ways to deliver this,” said Rob Levy, director of POS lending products, open banking and digital platforms at Barclays.
“We look forward to seeing how Visa may build on their payments experience to deliver value and protections for customers.”
Otto Benz, director of payments at Nationwide Building Society, also said: “We know that businesses and consumers alike are keen to explore the benefits of A2A transactions, and we expect demand to increase in the coming years.
“The industry will need to collaborate on innovations such as Visa A2A if we are to put in place the necessary rules, capabilities and consumer protections that will unlock the full potential of A2A.”
“We welcome an initiative that seeks to standardise the rules, capabilities and protections for customers using A2A payments,” concluded Pella Frost, head of everyday banking at HSBC UK.
The post Visa Gears up to Make Mark on A2A Payment in the UK and Bring Pay-by-Bank ‘Into the 21st Century’ appeared first on The Fintech Times.
