Account-to-account (A2A) payments have been used for many years for money transfers between bank accounts and the making of regular scheduled payments (direct debits).
But new technological developments mean A2A may soon be replacing payment cards in many circumstances.
The advent of open banking now allows A2A payments to become a convenient, less expensive, and safer alternative to traditional card transactions for both merchants and consumers.
Essentially, open banking allows payments to be made through a third-party service provider, directly from a bank account, eliminating payment card fees for all parties.
And the benefits of A2A don’t end there.
The rapid growth in ecommerce and card not present (CNP) transactions – accelerated by the COVID-19 pandemic – has also produced a dramatic increase in payment card fraud.
Multifactor authentication requirements have so far been the industry’s preferred response. But this has the disadvantage of increased check-out friction and abandoned shopping carts.
A2A payments, however, get round this problem by making use of the multifactor authentication already required by the customer’s banking app.
More and Better Data
A2A systems will also allow for the automatic provision of significant commercial data at the same time as payments are submitted, potentially providing great advantages to merchants.
The Move to a Card-Free Future
Major networks such as Mastercard and American Express are already responding to what they see as the threat of a “card-free” world by launching or acquiring their own A2A services.
And the advent of that world will also have significant implications for your business.
Find Out More
So, as always, if you’d like to find out more, please contact our expert team.
We’ll be happy to help.