Account-to-Account Transactions Take Hold In The EU

Digital Payment

Payments and immediate gratification are becoming joined in ways that reflect the direct and instant trends that have been evident since early last year. A slew of recent account-to-account announcements spotlight how A2A, as it is known for short, can take several paths toward shaking up consumer and corporate transactions. And several paths, it seems, will take us there.

To that end, BNP Paribas said this week that it will provide account-to-account payments for EU merchants through its partnership with Token, an open banking provider. The A2A payments are part of a new service, Instanea, which will integrate with shopping carts and payment gateways.

In terms of mechanics, through its interface, Token Pay provides access to up to 3,000 banks in Europe for A2A payments across apps and websites. eCommerce, then, gets a bit more direct.

“The advent of open banking APIs presents a unique opportunity to innovate and deliver instant payments at scale,” said Carlo Bovero, global head of cards and innovative payments at BNP Paribas, in a statement.  The continued lure of A2A, as account-to-account payments are known in shorthand, is evident in this announcement, and a string of others, following closely one upon the other.”

Europe, it seems, is ground zero in the A2A evolution. Earlier in the month, Mastercard completed the acquisition of a majority stake in Nets’ Corporate Services business. The payments network said the deal supports what it termed a “broader set” of account-to-account capabilities spanning clearing, settlement, bill payment and e-invoicing.

Not Just For Consumers 

The movement toward faster payments and more direct transactions, done via A2A functionality, is not limited to consumer-facing activity. B2B payments have faced significant headwinds, mired in paper checks and late payments. DSOs (days sales outstanding) accumulate, which means cash flow suffers.

Pascal Yammine, general manager and senior vice president of business software and customer relationship management solutions provider Salesforce Revenue Cloud, said that A2A payment methods can alleviate some of those pressures. In a recent interview with PYMNTS, he pointed to A2A as being especially useful for recurring payments.

Last year, SWIFT threw its own proverbial hat in the A2A ring. SWIFT’s own A2A offering, as reported in April, aims to streamline and accelerate domestic and cross-border transactions. SWIFT called the initiative an “ambitious platform expansion” that will enable the company to “support financial institutions to strengthen their positions in B2B payments and capture new volume in [small to medium-sized business (SMB)] and consumer segments.”

Thus, there are many paths to get corporate and consumer transactions up to speed, so to speak. In some cases, the A2A efforts rely on various payment rails, such as the card schemes or ACH – and in other cases, the network is the conduit.

As much as anything else, the pandemic has primed the pump for A2A. As Karen Webster noted in a recent column, the emphasis has been increasingly on offering alternatives to traditional checkout methods, on bespoke payment arrangements such as buy now, pay later (BNPL) options. In this latter case, she contended, the BNPL providers might themselves spur consumers to move to A2A activity, especially as commerce (consumer and corporate) skews ever more digital. The card networks are shifting away from interchange-reliant revenue streams, and away from the status quo.

The eventuality is that new payment networks would be created, scaling rapidly through the lures of speed and safety (boosted by AI and machine-learning technologies). The only question is just how quickly the change will be wrought, as the payments themselves get faster and more direct.

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