Recent innovations, technologies, and regulations in the payments field are meant to speed up payment processing, making funds available almost instantly, and, thus, streamlining the cumbersome and old infrastructure via which it would take days for a payment to reach its recipient.
Real-time payments aim to decrease the influence and monopole of card schemes on the payments ecosystem in banked countries worldwide, paving the way for merchants and end-users to have various options when paying for goods or accepting payments.
Renowned industry players, from merchants across different verticals to banks and payment service providers, acknowledge the need for a system that is independent of card schemes, and they are working on alternative infrastructures that would cut out transfer processing fees, speed up reconciliation, and offer enhanced customer services. To address this need, The Paypers has embarked on a journey to present an updated overview of the payments ecosystem, focusing on two key points: local and regional A2A schemes and Open Banking-based A2A payments and technology providers. This overview features two infographics, one for each segment, and it classifies the relevant players in each of these categories by region of activity. Therefore, we included in our overview both global companies and regional ones, present in Europe, North America, LATAM, APAC, and MEA.
A2A payments or bank-to-bank transfers are a direct way to transfer money between bank accounts, free of additional payment intermediaries. However, with global regulation lacking, each country imposes its own rules and restrictions, and the process remains somewhat difficult. In this context, there is a need for third-party players to step in and help facilitate transactions between different accounts in the same country – and, where the infrastructure allows it, expand towards other geographies as well.
One major difference when looking at the categories of A2A payments and Open Banking payments is that the first runs on legacy banking rails, often built before the digitalisation of the world and hard to scale and align across borders. Thus, most A2A players keep their business local. Bizum in Spain, BLIK in Poland, MyBank in Italy, and iDEAL in the Netherlands have significantly increased their customer base. They are no longer considered emerging local payment methods but default ways to send and receive money instantly, with access only to a mobile phone number and a local bank account.
With Open Banking becoming a more conventional, fast, secure, and accessible standard of financial transactions, its live and practical application is expected to revolutionise how companies conduct their business and how end-users choose to pay. For businesses, Open Banking payments mean no card processing costs, while payments settle more quickly than the ones made via cards, with payment conversion success rates exceeding 95%.
Open Banking allows payment system users to share their data with third-party providers (TTPs), which offer the infrastructure to enable the payment. At the same time, Open Banking payment providers retain most of the core benefits of A2A players but, through the help of APIs, they bring some key benefits, allowing them to expand beyond the borders of one country. Simply put, Open Banking is taking A2A payments to the masses. Thus, some companies have managed to expand their network and reach a global audience, including GoCardless and Worldline, while others are testing the waters regionally, with most of the developments in the field taking place in Europe. We invite you to take a closer look at the ecosystem of Open Banking payments and tech providers depicted in our infographic, which delineates key players in this space at the time of the report’s publication (July 2024).
To access the full infographic focusing on local and regional A2A schemes, we invite you to read our free-to-download Unlocking the Potential of A2A Payments Report 2024 – Changing the Way We Pay and Get Paid, which taps into the fast, ever-expanding A2A payments industry, being the ultimate source of information for businesses looking to grow their consumer base.
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