Visa (NYSE: V) announced that it is applying the company’s infrastructure, technology and capabilities to account-to-account (A2A) payments, giving consumers more control and protection on how they pay via bank transfers.
The global payments provider will collaborate “with industry players, including PayByBank firm Banked, to create a secure and sustainable payment experience across the ecosystem. Banked will utilize Visa A2A platform to facilitate variable recurring payments (VRP), which enables the automatic transfers of money from a payer to a merchant account, offering a seamless one-click experience or scheduled at regular intervals, depending on the use case.”
VRP provides a more flexible, secure and real-time way “to handle repeat payments compared to traditional methods like direct debits or standing orders.”
Visa A2A debuts in the UK in early 2025 and will “give consumers a smarter, digital user experience, advanced security features, and an easy-to-use dispute resolution service that represents a significant upgrade to the current pay-by-bank experience and aims to help people get their money back if something goes wrong.”
In 2023, £3.7tn was paid via A2A Faster Payments “in the UK, a 15% increase over the previous year.”
However, the payment of bills and subscriptions “through bank transfers remains largely unchanged since the inception of direct debit 60 years ago.”
This can make it harder 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using a service designed in a pre-digital age that, in many cases, still requires manual processes and has limited outdated consumer safeguards.”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.”
Visa is bringing decades of experience “in payment innovations – including tokenisation, biometrics and AI-based fraud fighting technology– to introduce new levels of control and usability for the benefit of consumers, businesses and banks. 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. In the future, we will look to support consumers in better managing subscriptions of products and services including digital streaming, gym memberships and food boxes.”
Visa A2A will enable banks and businesses to give consumers more choice and control over how they pay their bills. Key features include:
- Protection – A formal dispute resolution process will provide consumers with a reliable way to check transactions, whilst innovations such as biometrics will add a new level of security resulting in fewer unauthorised transactions.
- Choice – Consumers will have another option to pay for products and services directly from their bank account, with the click of a button.
- Control—It will be easier to set up and manage payment permissions, so consumers will be in control over when payments are made and will be able to set limit amounts so that higher bills will not unexpectedly put them under financial stress.
As noted in the update:
“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 payments card market to create an open system for A2A payments to thrive. Visa A2A will ensure consumer-to-business bank transfer payments have similar levels of protection that consumers are used to when they use their cards.”
Visa A2A will be based on an open system that is “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 modernize open banking-based payments.”
It is being designed in partnership with fintechs in the UK and will “be delivered by key UK industry players working with Visa.”