Connecting to contactless A2A payments
The current European payments landscape is bustling with a plethora of competitive payment providers and services that give both consumers and retailers access to countless electronic solutions. With the demand for instant, contactless payment options on the rise, the need for account-to-account (A2A) payments has never been greater.
Most European consumers have access to several payment methods, with the use of instant payments increasing significantly within the last few years. And with the application of new legislation, such as the open banking requirements in the revised Payments Services Directive (PSD2), the number of providers and solutions is set to increase even more.
Cards play a vital role in the payments landscape, as they currently make up for just a little over half of all non-cash transactions in Europe. That percentage, however, is growing exponentially with regard to contactless payments, not just in Europe, but worldwide. This has much to do with the reaction to COVID-19, which has sent a barrage of disruption through economies worldwide as consumers are encouraged to stay indoors and retailers have closed shop in an attempt to curb the spread of the virus.
A pandemic of contactless payments
As the world scrambles to put restrictions into place to support social distancing amid the pandemic, Mastercard recently reported that a significant share of consumers have begun exercising contactless payments for purchases. Seventy-nine percent of respondents in a global study indicated that they are now employing some form of contactless payment option, citing cleanliness and safety as crucial drivers. Mastercard has described this payment method surge as "accelerated and sustained contactless adoption".
A whopping 82% of respondents said they see contactless as a cleaner method of payment, with nearly half of the study’s respondents (46%) having already swapped out their everyday card for an option that provides contactless functionality. Besides the benefit of cleanliness, contactless payments are up to 10 times quicker than other in-person methods, leading many to see this as a time-efficient and more effective way to checkout.
According to Nordic API Gateway's Chief Business Development Officer, Michael Juul Andersen, there's never been a better time for retailers and consumers alike to take advantage of innovative checkout solutions like A2A payments:
“The acquiring market is evolving at an almost break-neck speed as innovation and competition ramp up and will continue to do so. The growing demand for cleaner, more frictionless payment methods is more than adequately met when employing A2A payments," he explains.
Michael Juul Andersen, Chief Business Development Officer at Nordic API Gateway
"A2A payments are fast, inexpensive and virtually hands free. You can view your balance before confirming a payment while enjoying the same level of security a bank offers. It's no wonder why more and more credit card companies are tapping into the benefits of A2A payments."
Besides the obvious advantages of a clean, quick and cheap solution, A2A payments provide a reduction in fraud thanks to strong customer authentication (SCA) applied to each transaction, deliver instant refunds and dispense faster settlements.
The global study has shown that almost three-quarters (74%) of respondents plan on employing contactless payments after the pandemic. Additional data from Mastercard also highlights over 40% growth in contactless transactions around the world in Q1 2020, while 80% of contactless transactions are initiated on payments of less than $25 – a range that has been traditionally dominated by cash.