The market share of A2A payments in e-commerce in Spain stands at 18%, still well below other countries such as Poland (67%), the Netherlands (62%) or Germany (27%)
The regulatory environment, following the entry into force of PSD2, is driving its growth in Europe, providing an optimal framework for the emergence and growth of new FinTechs with activities that focus on the initiation of this type of transactions
A2A transfers, those account-to-account payments that are executed directly between bank accounts, represent one of the payment solutions with the greatest potential for innovation and adoption in Europe, if they can overcome the major challenges to their future development: the improvement in execution times, which can currently range from 1 to 3 days; the development of proximity payments; the launch of payments without the presence of users; and the adoption of standards to enable interoperability and universal acceptance of this payment model in all types of environments. This is one of the main conclusions of the report "Present and future of account-to-account payments", prepared by Monitor Deloitte, Cecabank and the AEFI (Spanish Fintech and Insurtech Association).
Fernando Conlledo, Secretary General of Cecabank, explained in his opening remarks that "this report is of great value to better understand the changes that are taking place in payments and the possible scenarios that we will have to address in a situation of uncertainty such as the current context".
Juan José Gutiérrez, Corporate Director of Technology Services at Cecabank, alluded to the importance of standardising account payments and generating layers of value to make the proposal attractive to the market".
As analysed in the report, account-to-account (A2A) payments, a service that has existed for more than 150 years and has been widely adopted by users, enhance one of the three pillars of the European retail payments' strategy, which seeks to achieve payment sovereignty by improving the user experience and expanding the potential uses versus traditional means of payment. The difference lies in the absence of intermediaries in their transactions, as they are executed directly between financial institutions through a clearing house. As such, A2A payments offer neutrality and openness to third parties, especially in the context of the deployment of open finance models.
A favourable regulatory framework
The European regulator is working to foster innovation and competitiveness in the digital payments sector, laying the foundations for a more open, integrated and consumer-friendly payments market. This favourable regulatory environment, following the entry into force of PSD2, is driving its growth in Europe, providing an optimal framework for the emergence and growth of new FinTechs such as PISPs, with core activities that focus on the initiation of this type of transactions. In addition, various regulations (DMA, DSA, Payments Regulation, PSD3 and FIDA) related to digital payments and the use of information are being developed, as well as the European Commission's own proposal for the generalisation of instant payments, which will help to further boost this means of payment.
Arturo González Mac Dowell, Chairman of AEFI, pointed to "cost pressures, increased innovation capacity and threats from Big Tech" as the main pressures facing payment systems, but highlighted the "firm and decisive commitment of the European Union to developing state-of-the-art payment solutions, including instant account-to-account payment solutions".
In addition, the Chairman of AEFI stressed that "the role of FinTech has been crucial in the advancement of A2A payments, they are more agile and have been seen as facilitators of traditional players, allowing very rapid progress to be made".
Ample potential for growth in Spain
The growth potential of this business segment in Spain is very high, where the market share of A2A payments in e-commerce stands at 18%, compared to 7% in 2019, still well below other countries such as Poland (67%), the Netherlands (62%) or Germany (27%).
Gorka Briones, partner in charge of Monitor Deloitte in Spain, explained that "the adoption of payments in Spain is happening relatively quickly, as in the case of countries where there is a regulation that encourages this type of payment by the Central Bank and low pricing". Briones gave the example of South Korea, the leading country in terms of the number of instant transfers per capita, with a total of 141, followed by the Netherlands and the United Kingdom.
The report attempts to envisage potential future scenarios for A2A payments in the European context, depending on the existence of interconnected or common payment rails to ensure interoperability and efficiency between countries, and on the development, or not, of a pan-European competitive scheme to generate homogeneous value layers and interoperability. In addition, the possible entry into force of the digital euro in the coming years, and how it materialises, would represent a new scenario to be analysed, since the applications of both means of payment are absolutely interchangeable.
In the current scenario of maximum uncertainty in the world of payment services, both traditional operators and new entrants, providers and users, must constantly monitor the evolution of the main variables in order to take advantage of opportunities or mitigate the risks that may arise in the future. In this regard, Monitor Deloitte, Cecabank and the AEFI are committed to continue working on future reports that may be of interest to the industry.
Download the report at the following link
