Visa is set to revolutionize bank transfers with a new dedicated service for account-to-account (A2A) payments, aimed at bypassing traditional and often rigid direct debit processes. This new product, launching in the U.K. in early 2025, will also expand to the Nordic region and other European countries later in the year.
The A2A service will enable users to set up direct debits for transactions on e-commerce platforms with just a few clicks, simplifying the process significantly. Consumers will benefit from enhanced control and monitoring of these payments through their banking apps. A feature allowing users to raise issues or reverse transactions with a single click is also included, providing a level of protection similar to that of credit card transactions.
Visa’s initiative addresses common issues with direct debits, such as unauthorized auto-renewals and limited flexibility. The new system will support variable recurring payments (VRP), accommodating payments of varying amounts without the need for manual adjustments or new setups.
“This service aims to modernize bank payments, offering consumers a familiar digital experience with greater choice and peace of mind,” said Mandy Lamb, Visa’s Managing Director for the U.K. and Ireland. Visa is collaborating with UK banks and open banking platforms to develop this open system for A2A payments.
The product leverages open banking technology, which allows third-party fintechs to access consumer banking data with permission. This technology, bolstered by Visa’s 2021 acquisition of open banking firm Tink, facilitates direct bank-linked payment services.
Visa’s move into A2A payments comes amidst ongoing criticism of its card transaction fees. The company’s strategic shift aims to provide alternative payment methods while navigating the potential impact on its card business. Despite this, Visa remains committed to offering the best payment solutions, whether through cards or alternative methods.
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