Voice of the Industry

The future of payments – Instant, internationally compatible, and account-to-account

Tuesday 26 April 2022 09:18 CET | Editor: Oana Ifrim | Voice of the industry

Jordan Lawrence, Co-founder and Chief Business Development Officer at Volt, discusses the future of payments and the case of interoperability between global instant payment networks

As Mastercard’s CEO Michael Miebach fittingly states, how we move money is changing. People expect that the future of payments will provide an interconnected environment where sending or receiving money can be done from anywhere, in any currency, at any time, and instantly. Domestic and cross-border digital money transfers must be secure, frictionless, and regulated.

Over the past years, we have witnessed significant technological and business model changes and advances. New payment platforms and solutions, technology, regulation, and higher expectations from merchants and consumers are among some of the factors fuelling the demand for speed and interoperability. Across the globe, merchants and payment service providers (PSPs) are prioritising instant payments in their expansive ecosystems. 

One thing is certain: the new generation of payments services is instant and account-to-account (A2A). According to Mckinsey, the trajectory of ecommerce, digital payments, instant payments, and cash displacement has received a strong push forward in the past months. Overall, behaviour changes in response to the COVID-19 crisis caused a fundamental shift in the adoption of technologies, such as real-time account-to-account payment infrastructures.

Also, the opportunity to create a real-time payment system for retail and B2B payments is growing concurrently with the global push for Open Banking. A recent study from Juniper Research has found that the value of global payment transactions facilitated by Open Banking will exceed USD 116 billion in 2026, from just under USD 4 billion in 2021.

The research identified Open Banking-facilitated payments, where payments are made directly from bank accounts, as a growing threat to the dominance of cards within ecommerce. While card payments are well established, leveraging permissioned access to bank accounts can reduce fraud risks due to strict KYC (Know Your Customer) rules. The research recommends payment providers partner with Open Banking API providers now to reduce risks of disintermediation.

Moreover, Europe will account for over 75% of Open Banking payments users globally in 2026; demonstrating the head start that PSD2 has given this market. The introduction of Open Banking allows third parties to initiate payments on behalf of consumers as a registered PISP (payment initiation service provider) and make payments directly from a bank account.

Through Open Banking and real-time payments, A2A payments have a genuine opportunity to capitalise and become a rival to the card payment rail. This may heighten even more now, with Mastercard and Visa getting ready to raise credit card fees for retailers worldwide next month, thus merchants might embrace alternatives to card payments, like account-to-account (A2A) offerings. Merchants stand to gain clear benefits, such as receiving funds in real-time and at lower fees, unlike with card schemes, where it takes days for the process to complete. Also, Open Banking payments provide more security, with customers obtaining bank-grade security and avoiding card fraud risk.

A one-stop solution to global connectivity

Volt is a payment orchestration layer for global account-to-account (A2A) instant payments. We offer our services to PSPs, gateways, and acquirers that provide merchants with Volt on a white-label basis. Plus, we disintermediate debit card networks by offering buyers the ability to push a payment directly from their bank account to a merchant’s bank account in real-time.

Moreover, we aim at solving the current limitation of real-time payments; specifically, most of these networks are built only for specific countries. The real-time infrastructure is domestic and disparate, instant payment schemes are technologically fragmented and different from the legacy architecture. Volt aims to act as a single switch connected to all domestic instant payment networks worldwide to create global interoperability.

Our instant payments architecture unites the strongest networks to a single point of access, as we standardise and operationalise the new payments infrastructure. Already strongly established in Europe and the UK with over 5,000 bank connections on the PSD2 Open Banking network and covering over 680 million bank accounts in these regions, we have also expanded to Brazil by integrating Pix, enabling Brazilian consumers to pay in their local currency directly from their bank account - liberating them from slow, costly card infrastructure and giving them 'ultimate payment freedom' by being able to buy from global merchants plugged into Volt.       

We are also in discussions to expand into Singapore, Australia, Canada, and the US and plan to follow the rollout of instant payments around the world.

Will A2A payments become the next globally ubiquitous payment method? 

Where historically we have relied on Visa and Mastercard as the backbone for global ecommerce, the future is different. 

When we think of the future of payments, we see it represented by Open Banking-enabled instant account-to-account payments. People have embraced and now expect payment methods that deliver great value, flexibility, function instantly, and make their lives easier. Countries across the globe have created regulated, domestic instant payment settlement systems or are in the process of doing so. In Europe, particularly, the 2020 Retail Payments Strategy adopted by the European Commission (EC) highlighted the need for an EU-wide instant payments scheme, with the EC expected to present a legislative initiative on instant payments during the second half of 2022. 

At Volt, our intelligent payments platform harmonises these initiatives to a single point of access and interface. Volt is the global instant payment gateway restless for real time.      

Learn more about Volt`s new optimised, future-facing Checkout here.

For more details about Volt`s Circuit Breaker, Open banking’s first fraud prevention solution, follow the link here.

About Jordan Lawrence

Jordan, Volt’s Co-founder and Chief Business Development Officer, is a serial entrepreneur with over 20 years’ experience in payments. He oversees the company’s global sales and marketing strategies. In 2009, Jordan founded PCN Capital – one of Europe’s most prominent fintech consulting and recruitment agencies. Today, it helps leading fintechs find their ideal candidates.

About Volt

Volt is building the global infrastructure for real-time payments. Our network of networks unites and harmonises the world’s next-generation account-to-account payment systems, enabling merchants across the globe to accept real-time, account-based payments from their customers – seamlessly, and at lightning speed. Real-time payments, everywhere.

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Keywords: account-to-account payment, instant payments, Open Banking
Companies: Volt
Countries: World


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