Consumers, payment service providers (PSPs), and small businesses have been adopting A2A payments at an astonishing rate in the last two to three years. A2A accounted for 18% of Europe’s ecommerce transaction value in 2023 and is expected to grow further in the next years.
Thus, A2A payments are becoming valid alternative methods to support the increase of ecommerce transactions, while fostering financial inclusion and assuring a seamless and secure user experience.
On the merchant side, businesses of any size or industry increasingly look for methods to cut costs, enable the digitalisation of their processes, and improve their cash management. A2A solutions like MyBank respond to these needs, as they present notably lower transaction costs and deliver more efficiency in terms of settlement processes and extra transaction data. The pre-filled bank transfer ensures fewer input errors by payers and simplifies back-office operations for corporates, warranting a 100% automated reconciliation. A trusted user experience is enabled via online/mobile banking channels and MyBank’s legal framework – which significantly reduces fraud and eliminates chargeback risks. On top of this, the immediate certainty and irrevocability of the underlying payment contribute to faster order management, offering a better purchase experience.
According to Juniper Research, the total B2B transaction value is expected to be USD 124 trillion in 2028, which is interesting if we consider the multiple challenges to digitising this space, and hence the opportunities. Apart from cost savings, efficiency is one of the main reasons to adopt e-payments. In this context, A2A solutions like MyBank offer merchants the efficiency they look for in terms of processes, costs, and user experience provided to clients.
Firstly, the information included in an A2A payment, alongside the immediate notification of an irrevocable payment, represents an optimisation in cash flow management and reconciliation. To this, we can add the immediate settlement provided by PSPs – although, especially in the B2B segment, merchants claimthat they rely solely on real-time online confirmation to run their cash management and liquidity operations.
Secondly, A2A payments have lower transaction fees as they do not incur card-related interchange fees. Additionally, A2A significantly reduces fraud and eliminates chargeback risks, translating into less time-consuming processes or costly payouts.
Furthermore, offering A2A payments means providing a simplified and secure user experience to customers who do not have to register, create any new account, or download any app since they use their online/mobile banking accesses to authorise payment orders. For this reason, A2A payments offer more reach than wallet-based solutions, and are more inclusive, even for those less acquainted with evolving digital tools, and thus help increase business opportunities.
Open Banking certainly transformed the financial landscape and enabled entrants to bring a set of new payment and financial solutions to the market. It also pushed the industry to develop the concept of APIs and the integration between banks and third-party applications.
Open Banking represents a revolution that is expected to boost opportunities and drive further the evolution of the payment industry. However, I believe more is necessary to bring the announced benefits to the market.
MyBank started years before Open Banking was a topic, and we believe that scheme-based A2A solutions like MyBank still provide a greater value proposition. The experience we gained over the past decade and the feedback we persistently receive from our community is that a scheme-based A2A solution like MyBank – governed by a legal framework, using standardised proprietary APIs, and administrated by a solution manager – provides trust, operational stability, and a more efficient ecosystem. Having a distinctive brand, contractual agreements, common rules and guidelines, annual technical releases, and stakeholder working groups are key features of MyBank.
A2A payments can accommodate the needs of businesses of all sizes, whether they are medium or large. For instance, MyBank has changed how B2B petrol companies sell their products. In the past, they used to be paid with cheques by the petrol stations. Now, they receive a MyBank irrevocable payment and an immediate notification hours before the petrol is delivered.
In the automotive industry, Mercedes dealers used to go to the bank and pay the parent company to obtain the so-called ‘compliance certificate’ that would allow them to sell a car. Today, the real-time information delivered with a MyBank payment optimises the processes on both sides: dealers can pay from their office, and Mercedes can deliver the certificate instantly.
As mentioned previously, the efficiency of the processes and competitive costs are highly appealing to merchants. For example, in the travel industry, Grimaldi Lines said that MyBank commissions are nearly 70% lower than any other online payment method. MyBank is also appreciated in industries like insurance, telco, ticketing, associations, utilities, pharma, financial services, and public administration, among others.
This editorial piece was first published in The Paypers' 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.
Tarik Zerkti has 20 years of experience in the European payments ecosystem, digital transactions, and ecommerce. In 2005 he joined EBA Clearing, and in 2011, he co-founded MyBank, the A2A payment solution owned and managed by PRETA, EBA Clearing’s subsidiary. He is now CEO of PRETA and is also a member of the SPAA Multi-Stakeholder Group, Scheme Technical Player Multi-Stakeholder Group of the EPC, senior advisor on Digital Transactions for Ecommerce Europe, and Associate Member Representative at the European Banking Association.
MyBank is an A2A payment method allowing citizens and companies to pay or be paid online for their various goods and services. It provides a trusted brand, irrevocable SEPA Credit Transfers, and end-to-end reconciliation. Developed by PRETA, a wholly owned subsidiary of EBA CLEARING, MyBank is open to authorised PSPs in the SEPA, including credit and payment institutions.
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