The collaboration, announced Wednesday (Jan. 21), is designed to bring to market Visa A2A, an account-to-account (A2) payment solution, for recurring and variable payments.
“Recurring payments underpin lending, insurance, utilities, and collections; but while direct debit is low-cost, it’s slow and rigid, making it difficult to adapt when customer circumstances change,” the companies said in a news release.
“Visa A2A addresses this gap by enabling real-time account-to-account recurring payments with immediate settlement and clear customer consent. Payments execute via Faster Payments, while Visa provides the operational governance, rules and commercial framework required to support adoption at scale.”
Businesses, the release added, gain near real-time visibility of success or failure and immediate settlement, allowing faster recovery, more responsive customer support and improved cash flow timing. The companies say their collaboration provides an alternative to direct debit and card-on-file, aimed at offering a smarter way to make recurring payments.
“Recurring payments have not kept pace with how customers live or how businesses need to operate,” said Eline Blomme, chief product officer at Acquired.
“Visa A2A changes that equation. By combining real-time account to account payments with clear customer consent and operational governance, we are giving businesses a more responsive way to collect and customers greater visibility and control.”
Acquired last year joined 30 other organizations to create a company that functions as a central operator for commercial variable recurring payments in the U.K.
Commercial variable recurring payments, the company said at the time, are a new payment method that lets consumers authorize third-party providers to initiate payments of varying amounts from their bank accounts to businesses, with rules and limits established by customers.
Meanwhile, PYMNTS spoke last week with Jeffrey Chen, vice president of Digital Issuer Solutions Portfolio at Visa, about some of the frictions facing consumers when it comes to recurring payments.
The growth of the subscription economy, the report said, has led to an information imbalance among consumers, merchants and issuers. Consumers need transparency. Merchants, meanwhile, see cancellations but have no context about why they happen or whether a consumer might be enticed back.
“Oftentimes, there is a lot of asymmetric information,” Chen said. “Sometimes consumers do not know where their subscriptions are, they do not know when payments are coming up, they do not know how much they owe. But merchants have quite a bit of knowledge gaps as well. They do not know the consumer’s intent.”
