Visa introduces new model for A2A payments in the UK

editorial

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In 2023, £3.7 trillion was paid through A2A Faster Payments in the UK, a 15% increase on the previous year. However, paying bills and subscriptions by bank transfer has remained largely unchanged since direct debit was introduced 60 years ago.

Visa says billions of pounds are being lost or withheld from consumers under the current model due to issues such as unauthorized auto-renewals or a lack of bill payment flexibility.

Visa A2A aims to give banks and businesses more choice and control over how they pay their bills, starting with utilities, rent and childcare fees. This will gradually expand to subscriptions to products and services, including digital streaming, gym memberships and food boxes.

The complete package includes a formal dispute resolution process, biometric security controls and an easy way to set up and manage payment authorizations.

For businesses, the offering includes real-time processing via Faster Payments and notification when a consumer changes or cancels their payment authorizations. It also gives them the opportunity to include more transaction data for matching.

Mandy Lamb, managing director of Visa UK and Ireland, said: “Bank payments are a popular method of paying for bills and services, but have remained largely unchanged since the introduction of direct debit 60 years ago.” We want to bring bank transfer payment methods into the 21st century and provide consumers with choice and security. Visa A2A will ensure that bank transfers from consumers to businesses enjoy a similar level of protection as consumers are accustomed to using their cards.”

Visa is working with banks and payment providers – including Banked, Modulr, Moneyhub, Salt Edge, Vyne and Yaspa – to develop the new system.

Pella Frost, head of day-to-day banking at HSBC UK, said: “We welcome an initiative that aims to standardize the rules, options and protections for customers using account-to-account payments. Visa is well positioned to build on the growth we are seeing, and we look forward to seeing how it will work with the industry to create a safe and sustainable payments experience for the ecosystem.”