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Visa has announced that it will launch faster account-to-account (A2A) payments.
The A2A faster payments service will be available through Visa in Great Britain from early 2025.
Account-to-account payments require Open Banking and serve as an alternative to regular debit and credit card payments from the bank.
Here’s what it is and why the US payments giant believes it will save Brits billions of pounds.
Faster payments: Visa launches account-to-account payments
What are A2A payments?
A2A payments are an alternative method of making payments compared to bank-to-bank card payments.
They allow the direct transfer of money from the account of a person making a payment to the bank account of a beneficiary.
This eliminates the need for third-party intermediaries, such as a debit or credit card.
Account-to-account payments allow customers to make payments directly from their bank accounts without entering card details or other payment information.
Instead, when a customer is ready to make a payment, they select their bank and are automatically transferred to their mobile or online banking app to authorize the transaction from their banking app.
HMRC allows people to pay their tax in this way by making account-to-account payments via open banking. Instead of entering credit or debit card details, there is the option to pay via bank account.
In 2023, £3.7 trillion was paid via A2A Fast Payments in the UK, a 15 percent increase on the previous year, according to a report by Pay UK.
How will it work with Visa?
All parties participating in A2A payments will be able to join Visa’s account-to-account payment service, including banks, payment providers and eligible businesses.
From early next year, UK banks and businesses will be able to offer Visa A2A to consumers, which they can use to make payments for bills such as utilities, rent and childcare fees.
It is being designed in collaboration with UK fintech companies including Banked, Modulr, Moneyhub, Salt Edge, Vyne and Yaspa.
Visa A2A payments could be used in the future to manage subscriptions to products and services, including TV streaming services, gym memberships and food subscription boxes in the future.
Visa said the move will also make it easier for customers to recover their money if they have been victims of fraud.
Account-to-account payments will have a dispute resolution process for consumers to verify transactions.
Visa recently launched its Visa Protect tool for A2A payments, available to all UK banks.
The technology helps intercept suspected fraudulent transactions in real time, stopping scams before money leaves the victim’s bank account.
Visa said the A2A payments service could help customers save money compared to traditional card payments.
According to a government report, around £1.6bn was lost in 2021 due to automatic renewals – when money is automatically taken from customers’ accounts (for example, direct debits and standing orders that were not cancelled).
This is because paying bills and subscriptions by bank transfer remains largely the same since direct debit was introduced 60 years ago.
For businesses, account-to-account payments are generally more cost-effective due to the lower transaction fees that come with eliminating debit and credit cards.
What do banks say about Visa account-to-account payments?
Otto Benz, payments director at Nationwide Building Society, said: ‘We know that both businesses and consumers are interested in exploring the benefits of A2A transactions and we expect demand to increase in the coming years.
‘The industry will need to collaborate on innovations like Visa A2A if we are to implement the necessary standards, capabilities and consumer protections that will enable the full potential of A2A to be realized.’
Pella Frost, head of everyday banking at HSBC, said: ‘We welcome an initiative that seeks to standardise the rules, capabilities and protections for customers using account-to-account payments.
“Visa is well positioned to take advantage of the growth we are seeing and we look forward to seeing how it will work with the industry to create a safe and sustainable payment experience for the ecosystem.”
Barclays director Rob Levy said: ‘We support initiatives that drive competition and innovation in A2A payments, and an industry-led scheme solution is one of many ways to achieve this.
“We look forward to seeing how Visa can leverage its payments expertise to deliver value and protection to customers.”
A Lloyds Banking Group spokesperson said: ‘A2A payments present opportunities for businesses and consumers, and we support the industry-led solutions being developed in this space.
“We welcome innovation in the market to improve the overall experience for people making payments.”
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