Ludovic Francesconi: I believe that the year 2024 will likely become a transformative phase in A2A payments in Europe, predominantly influenced by two significant trends: instant payments and wallets. This phase would obviously include the coming launch of EPI’s digital wallet solution, wero. The evolution of these trends is expected to be further catalysed by emerging regulations like the instant payment regulation and PSD3, fostering a dynamic Open Banking and Open Finance landscape. A main promise for consumers and merchants is the enablement of new features, enhancing and enriching the commerce experience for both businesses and consumers.
The rapid adoption of instant payments across Europe signifies a shift towards more efficient, real-time financial transactions. This shift aligns with the growing demand for immediacy, control, and accessibility in the digital age, in the difficult economic context we know. I believe that the enablement of instant payments in the account-based payments infrastructure paves the way for bank-driven payment methods, delivering maximal security and trust in payment transactions. In the next five years, we expect these trends to lead to more integrated, user-friendly payment solutions across Europe, substantially impacting the financial landscape.
Fabian Mansfeld: I think the current A2A payment landscape in Europe is characterised not by a lack of use cases but by the need to overcome inefficiencies and limitations of existing payment infrastructures. These infrastructures, some dating back over several decades, have not kept pace with the digital transformation, as they were built for a totally different commerce reality.
We see that across all payment scenarios, the emphasis is shifting towards leveraging digital payment infrastructure more effectively, bypassing intermediate steps. This approach not only enhances efficiency but also augments the security and transparency of transactions. It will also lead to the direct integration of additional services with bank accounts, making them more independent and versatile. To realise this, A2A payments must match the convenience and functionality of existing payment methods and then extend beyond them by linking additional services directly to the consumers’ bank accounts. This evolution will address unmet needs by providing seamless, secure, and transparent financial transactions.
Looking forward, we foresee a landscape where A2A payments become as ubiquitous and even more versatile as traditional methods, fostering a more inclusive and efficient financial ecosystem in Europe.
Ludovic Francesconi: The future of A2A payments in Europe appears promising, poised for significant growth in the coming years. The focus, I think, will likely be on developing solutions that not only match the capabilities of current payment systems but also offer enhanced services linked to consumers’ bank accounts. In the near term, A2A payments are set to emerge as a viable alternative to existing digital and card payment methods. However, they are unlikely to render these traditional systems obsolete due to the established usage pattern in the current payment landscape and long-lasting consumer habits. The real potential of A2A lies in its ability to address all payment use cases and offer added-value services and conveniences that existing systems cannot provide. It is also worth highlighting that the digitisation of assets also goes way beyond monetary assets. Bank accounts could be obvious custody for other types of digital assets, and a bank-driven digital wallet solution could be the way to interact with these assets securely.
Also, the growth trajectory for A2A payments will likely involve a proliferation of diverse solutions catering to specific needs across B2C and B2B sectors. However, as with any rapidly evolving market, this expansion will eventually lead to consolidation, reflecting the inherent scale-based nature of the payment industry. We anticipate that A2A payments and wero will significantly transform the European payments landscape, offering more integrated, user-centric financial services and strengthening the overall efficiency and security of the financial systems.
This interview was originally published in The Paypers` Global Payments and Fintech Trends Report 2024.
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