A2A Payments for POS: Benefits, Challenges, and Card Competition

In this article, Vasyl Soloshchuk , CEO of INSART, outlines the current state of A2A payments. Vasyl explains how these payments function within POS devices and argues why they are here to stay, despite the competition with card payments within the POS ecosystem.

Almost out of the buzzword stage, account-to-account (A2A) payments are now a formidable contender, particularly in the point-of-sale (POS) systems market. A2A payments offer a streamlined and efficient alternative to traditional card payments, coming with a host of benefits and brand-new challenges.

What A2A payments are

Account-to-account (A2A) payments, also known as bank transfers, are a direct transfer of funds between two bank accounts without the involvement of intermediaries such as card networks or payment processors.

• These transactions are typically facilitated through online banking platforms or mobile banking applications, providing users with a convenient and secure method of transferring funds.

• Unlike traditional card payments (using physical cards + complex networks for authorization and processing,) A2A payments streamline the transaction process by directly linking the payer and payee's bank accounts.

• The essence of A2A payments lies in their simplicity and efficiency, allowing individuals and businesses to transfer funds seamlessly without third-party intermediaries.?

A2A payments use the existing banking infrastructure and digital channels as rails for your funds to go through quickly and securely.

How A2A payments for POS devices work

Let’s zoom in on the transaction process.

1. The process begins when a customer purchases using an A2A payment option at a POS terminal.

2. Upon selecting this option, the terminal prompts the customer to initiate a bank transfer from their bank account to the merchant's designated bank account.

3. The transaction is authenticated through secure banking channels, often employing methods such as two-factor authentication or biometric verification, to ensure the integrity and security of the transaction.

4. Once the transfer is authorized and confirmed, the funds are transferred directly from the customer's account to the merchant's account, seamlessly completing the transaction in real time. Simple as.

The benefits: Why A2A payments will last

A2A payments for POS devices have quite a number of advantages up their sleeve that enhance their endurance and attractiveness within the financial landscape. The following benefits solidify the position of A2A payments:

1. Dropping intermediaries: A2A payments bypass intermediaries like card networks and acquirers, reducing merchant transaction costs and expediting settlement times. This direct transfer approach streamlines the payment process, enhancing efficiency and reducing operational overhead.

2. Enhanced security measures: By eliminating the reliance on physical cards and central intermediaries, A2A payments offer heightened security, safeguarding the interests of both merchants and customers. Solutions like kevin. explore the security aspect, enhancing the ability of A2A payments to mitigate the risks associated with fraud and chargebacks prevalent in card transactions.?

3. Seamless integration with banking infrastructure: The seamless integration of A2A payments with existing banking infrastructure offers a familiar and intuitive payment experience for customers who enjoy the benefits of online banking. This interoperability facilitates smooth transactions and fosters customer trust and adoption.?

4. Convenience and familiarity: A2A payments have already earned their reputation as a familiar and convenient payment option among online banking practices. With the ubiquity of digital banking platforms, A2A payments resonate with modern consumer preferences and gain growing popularity.?

For instance, in December 2023, the abovementioned kevin. received a partnership opportunity from Switchio by Monet+ , a digital payment processing platform provider. As a result of the collaboration, kevin. A2A solution will be available on all POS (point-of-sale) terminals connected to the Switchio platform.

Another example is Token.io . The solution allows merchants to accept A2A payments from customers through a branded app or credit management dashboard. Also, using Token.io’s solution, merchants can process payment requests via email or WhatsApp through a branded webpage.

Judging by these arguments, it is no wonder that McKinsey predicts that by 2027, remote consumer purchases at the POS, excluding bill payments, could reach a volume beyond $200 billion. That means roughly 5% share of US digital commerce spend.

Continue reading about A2A payments for POS devices, the challenges in them, and how they perform against card payments by the link below.

?? Keep reading: https://insart.com/signals/a2a-payments-for-pos-terminals