VISA’s A2A pay-by-bank service will introduce a more secure payment method for consumers in the UK and Europe next year. This innovative service offers a way for customers to make bill payments and purchases directly from their bank accounts.
New Payment Methodology
Currently, when setting up direct debits for rent, utilities, or childcare, consumers often have to share extensive personal data. They also need to provide advance notice if they wish to change payment amounts, and managing one-off transfers can require multiple interactions. Many consumers face significant losses each year due to unauthorized subscription auto-renewals.
Visa A2A aims to address these issues by enhancing consumer choice and providing a digital experience similar to using credit cards. The service utilizes variable recurring payments (VRP) allowing users to adjust their direct debits with every transaction. It also features biometric authentication for added security against unauthorized transactions.
Consumer Benefits
Mandy Lamb, Managing Director of Visa UK and Ireland, stated that the goal is to bring pay-by-bank methods into the 21st century, offering consumers peace of mind and a familiar digital experience. This service will ensure that consumer-to-business bank transfer payments have similar protections as those seen with credit cards.
Initial Scope and Pilots
In early 2025, Visa will pilot A2A in the UK before expanding to Europe later in the year. The platform initially has limited scope; it cannot be used for recurring expenses such as streaming services or gym memberships.
Business Benefits
The service could bring immediate benefits to businesses by leveraging the UK’s Faster Payment System rails, which can provide near real-time settlement. Merchants will receive faster notifications if a consumer cancels or modifies a payment, and the system’s higher throughput for transaction data should facilitate smoother reconciliation.
Open Banking
The introduction of Visa A2A is expected to be well-received in the UK, given its status as an open banking trailblazer. The U.S., lagging behind due to established credit card culture, might also benefit from this solution if it gains a U.S. launch.
