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Traditionally they have been used by consumers to schedule regular bill payments (i.e. direct debit) or using domestic payment schemes like iDEAL in the Netherlands, but through PSD2 and instant payments, A2A has a genuine opportunity to become a credible rival to the card payment rail for everyday transactions too.
A2A payments are hot property in the investment market right now as well as they potentially offer a slicker, more seamless alternative to card payments. Only recently Visa acquired the Swedish A2A fintech Tink and Mastercard acquired the Danish A2A reach provider Aiia.
There are also currently more reasons for this type of transaction to grow in popularity. For both parties, payer and payee, there is better user experience and greater security against fraud compared to traditional card payments and for the merchant there are significantly lower fees than the card-based alternatives – at the moment.
With Mastercard announcing it will increase its interchange fees from October 2021 for UK consumers buying from Europe, and rumours that a merchant fee hike – delayed by the pandemic – will be reintroduced by Visa/Mastercard, A2A has a unique opportunity to capitalize.
Alex Rolfe is Managing Director and Editor in Chief of Payments Card & Mobile, Partner at Accourt and Publisher of Payment Cards Statistical Yearbooks.
Henrik Hodam is a Senior Product Manager at Worldline and has been working at equensWorldline for 20 years in the banking, telecom and transport industry. He has a wide experience in instant payments especially account-based and mobile payments as well as alias services and request-to-pay. Henrik in his role as product manager is responsible for the Account-Based Payments and SEPA Proxy Lookup service.
