Visa is looking to expand its role in payment flows beyond traditional card networks. The largest network in the United States plans to offer Account-to-Account (A2A) services in the United Kingdom starting in 2025. According to Visa’s executive director, Ryan Mcinerney, this service will also be available in other parts of Europe and other countries. This announcement was made during the company’s first fiscal quarter earnings conference call.
Initially, Visa will focus on using A2A for invoice payments between merchants and consumers, an area where there is growing demand. However, the company plans to expand this service to include direct transfers between bank accounts, making the payment experience better for its customers.
A2A payments allow for direct transfers from the payer’s bank account to the seller’s or supplier’s account, without using credit or debit cards as intermediaries. These payments, also known as “bank payments,” are attractive to merchants because they eliminate the exchange rates associated with card transactions.
Digital alternatives in the payments sector are becoming more popular worldwide. It is expected that A2A payments will grow at a rate of 14% per year from 2023 to 2027, making them a key payment option in the coming years. This growth has led companies like Visa to offer new services, looking for opportunities as the US card market and other regions become more established.
In this context, Visa has announced that it will introduce its bank payment service in the US after establishing its presence in Europe. The company’s European strategy relies on Tink, an open banking fintech acquired by Visa in 2022, which makes it easier to move money between banks, shops, and fintech companies.
However, Visa faces increasing competition in the A2A sector, especially in markets like the US and Latin America, where other digital payment companies are expanding their services. In Europe, the growth of A2A payments has been slower because card processing costs are lower. As a result, A2A payments have focused on specific areas, such as high-risk businesses, large transactions, and recurring payments.