Great to see Boodil x Shopify featured on the open banking merchant platform partnerships. Thanks Marcel van Oost #payments #tech #openbanking
Account-to-Account (A2A) Payments are slowly but surely disrupting traditional Payments, a trend accelerated by Open Banking. Let’s dive in: Initially popular for more business-to-business (B2B) or peer-to-peer (P2P) use cases, today A2A payments are gaining traction among consumer-to-business (C2B) models. In 2023, the FinTech landscape witnessed a surge in Pay-by-Bank initiatives and advancements in A2A payments via open banking. Key players making waves included payment processors, networks, merchant platforms embedding A2A payments, and a handful of neobanks and infrastructure players joining the fray (see picture below👇). For example: ► Adyen teamed up with Plaid to announce its Pay-by-Bank services in North America, ensuring a seamless and cost-efficient solution for businesses and end-consumers alike. ► Shopify partnered with Volt.io to allow merchants in Europe, the UK, and Brazil to offer Volt’s Pay by Bank solution at checkout, letting customers initiate real-time A2A payments. A2A payments are also entering the Recurring Payment space, quickly and efficiently. Variable Recurring Payments (VRP) enables customers to give permission to a third party to make a series of payments from their bank account at variable amounts and intervals with one Strong Customer Authentication (SCA) step to set up. While VRPs have begun to garner significant attention from banks, merchants, payment service providers, and infrastructure players worldwide, 2023 saw a majority of the collaborative movement for the initiative in the EU and UK. For example: ► Tink joined the UK’s Joint Regulatory Oversight Committee (JROC)’s new working groups on VRP, with the goal of creating a framework that fosters a faster and smoother partnership between banks. ► Plend | B Corp partnered with GoCardless to offer VRPs via the latter’s Instant Bank Pay feature, aiming to provide customers with increased flexibility over loan repayments. VRPs are making waves in the fintech world because they offer a safer and cheaper alternative to direct debits and card payments. The key? No need for businesses to handle or store sensitive card data, making them less susceptible to data breaches. Plus, businesses also avoid compliance hassles as they don’t store sensitive card information. In 2023, collaborations in the open banking world boomed, pushing VRP and Pay-by-Bank mainstream. 2024 is the year of the big break through. For example: ► Uber introduced “Pay by Bank” (by Stripe) as a Payment Option, and they are pro-actively incentivising users with cheaper rides if they choose that method over Cards and Wallet: https://bit.ly/45GZoWr ► A long list of examples from 2024 alone: https://bit.ly/3zbuE3U Sources: WhiteSight (https://bit.ly/3VEZ4Tw) Arthur Bedel 💳 ♻️ Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ]