Banked selected to support Visa A2A launch, an open system to boost consumer protection with smarter bank transfer payments
Visa today announced that it is applying the company’s infrastructure, technology and capabilities to account-to-account (A2A) payments, giving consumers more control and protection on how they pay via bank transfers.
The global payments provider will collaborate with leading industry players, including PayByBank firm Banked, to create a secure and sustainable payment experience across the ecosystem. Banked will utilise Visa A2A platform to facilitate variable recurring payments (VRP), which enables the automatic transfers of money from a payer to a merchant account, offering a seamless one-click experience or scheduled at regular intervals, depending on the use case. VRP provides a more flexible, secure and real-time way to handle repeat payments compared to traditional methods like direct debits or standing orders.
Commenting on the significance of the launch, Banked CEO Brad Goodall said: “The customer benefits of using VRP include increased control and security of online payments, but the value for businesses is equally compelling. Banked recognises the opportunity to accelerate in this space and that’s why we’re excited to be collaborating with Visa to enable rapid uptake of Pay by Bank across a range of industries including insurance, government, utilities, and retail. The launch today is testament to the strong partnership we have forged with Visa to deliver a better way of paying that is beneficial to consumers and merchants alike.
Visa A2A debuts in the UK in early 2025 and will give consumers a smarter, digital user experience, advanced security features, and an easy-to-use dispute resolution service that represents a significant upgrade to the current pay-by-bank experience and aims to help people get their money back if something goes wrong.
In 2023, £3.7tn was paid via A2A Faster Payments in the UK, a 15% increase over the previous year. However, the payment of bills and subscriptions through bank transfers remains largely unchanged since the inception of direct debit 60 years ago. This can make it harder for consumers to manage their finances using a service designed in a pre-digital age that, in many cases, still requires manual processes and has limited, outdated consumer safeguards.
This affects consumers, businesses and the wider UK economy. In fact, billions of pounds are lost or withheld from consumers due to problems such as unauthorised auto-renewals or the lack of flexibility around bill payments.
Visa is bringing decades of experience in payment innovations – including tokenisation, biometrics and AI-based fraud fighting technology– to introduce new levels of control and usability for the benefit of consumers, businesses and banks. From early next year, banks and businesses in the UK will be able to offer Visa A2A to consumers making bill payments such as utilities, rent and childcare fees. In the future, we will look to support consumers in better managing subscriptions of products and services including digital streaming, gym memberships and food boxes.
Choice, control and protection for consumers
Visa A2A will enable banks and businesses to give consumers more choice and control over how they pay their bills. Key features include:
• Protection – A formal dispute resolution process will provide consumers with a reliable way to check transactions, whilst innovations such as biometrics will add a new level of security resulting in fewer unauthorised transactions.
• Choice – Consumers will have another option to pay for products and services directly from their bank account, with the click of a button.
• Control – It will be easier to set up and manage payment permissions so consumers will be in control over when payments are made, and will be able to set limit amounts, so higher bills will not put them unexpectedly under financial stress.
Mandy Lamb, Managing Director, Visa UK and Ireland said:
“Bank payments are a popular way to pay bills and services but have remained largely unchanged since the inception of direct debit 60 years ago. The UK is a dynamic and competitive market and UK consumers have become used to the convenience of digital transactions, from tapping in for their morning commute to grabbing a coffee on the go or shopping online after work.
“We want to bring pay-by-bank methods into the 21st century and give consumers choice, peace of mind and a digital experience they know and love. That’s why we are collaborating with UK banks and open banking players, bringing our technology and years of experience in the payments card market to create an open system for A2A payments to thrive. Visa A2A will ensure consumer-to-business bank transfer payments have similar levels of protection that consumers are used to when they use their cards.”
Open industry model, fostering collaboration
Visa A2A will be based on an open system available for all eligible banks and other industry partners to join, and introduces standards, rules and a dispute management service to help protect consumers and further modernise open banking-based payments. It is being designed in partnership with leading fintechs in the UK, and will be delivered by key UK industry players working with Visa.
More confidence for businesses
Visa A2A also benefits businesses, as near real-time settlement through Pay.UK’s Faster Payment System gives them greater visibility over payments and makes cash flow management simpler. Businesses can also take advantage of the digital nature of Visa A2A, including notifications if a consumer changes or cancels payment permissions, and it also provides them with the ability to include more transaction data for reconciliation.