Visa has announced its plans to introduce a dedicated service for bank transfers in Europe, bypassing the traditional credit card and direct debit processes. This new service, called account-to-account (A2A) payments, will allow users to set up direct debits on merchants’ e-commerce platforms with just a few clicks.
With this new service, consumers will have better control over their payments and will be able to easily monitor and address any issues by simply clicking a button in their banking app. This will provide them with a similar level of protection as when using their cards, making it easier to deal with problems like unauthorized auto-renewals of subscriptions.
The A2A service will initially launch in the U.K. in early 2025, with plans to expand to the Nordic region and other parts of Europe later in the year. This new payment method aims to address the current challenges faced by consumers when setting up direct debits for recurring payments, such as utility bills or childcare expenses.
Currently, setting up a direct debit requires consumers to share their bank details and personal information, which can be insecure. Additionally, static direct debits require advance notice of any changes to the payment amount, making it cumbersome for consumers to make adjustments.
With Visa’s A2A service, consumers will be able to set up variable recurring payments (VRP), allowing them to manage recurring payments of varying amounts more easily. This new payment method leverages open banking technology, which provides third-party fintechs with access to consumer banking data.
Visa’s acquisition of Tink, an open banking service, for 1.8 billion euros ($2 billion) in 2021, underscores the company’s commitment to embracing new payment technologies. By offering a more streamlined and secure payment method, Visa aims to provide consumers with more choice and peace of mind when making online transactions.
While Visa did not disclose how it plans to monetize its A2A service, the company has stated that its focus is on enabling the best ways for people to pay and get paid, whether through card or non-card transactions. By introducing this new payment service, Visa is positioning itself to adapt to the evolving landscape of digital payments and provide consumers with a more convenient and secure way to manage their finances.
