Visa has recently announced its plan to revolutionize the payment industry by launching a dedicated service for bank transfers. This service will allow users to set up direct debits on merchants’ e-commerce stores with just a few clicks, providing them with a higher level of control and security.
Traditionally, when setting up direct debits for payments such as utility bills or childcare, consumers have had to fill in a direct debit form, sharing their bank details and personal information. This process lacks security and often leaves consumers with limited control over the payment amounts. However, with Visa’s new account-to-account (A2A) service, consumers will be able to monitor their payments more easily and raise any issues with just a click of a button in their banking app.
Visa’s A2A service will introduce variable recurring payments (VRP), allowing consumers to make and manage recurring payments of varying amounts. This innovative payment method will provide consumers with more flexibility and control over their finances, making it easier to manage subscriptions and other recurring expenses.
Visa is collaborating with UK banks and open banking players to bring this technology to life. The A2A product relies on open banking, which gives third-party fintechs access to consumer banking data. This technology has gained popularity in Europe, enabling new payment services that can link directly to consumers’ bank accounts and authorize payments on their behalf.
Visa’s move towards direct bank transfers could potentially disrupt its own card business, as merchants may choose to bypass cards for payments. While Visa has not shared details on how it plans to monetize this service, the company remains focused on enabling the best ways for people to pay and get paid, whether through card or non-card transactions.
Visa’s decision to launch a dedicated service for bank transfers marks a significant step towards modernizing the payment industry. By providing consumers with more control, flexibility, and security over their payments, Visa is setting a new standard for digital transactions in the 21st century.