The author of the article begins by addressing common misconceptions about the efficiency of the payments industry. They recount their recent experiences with making payments, highlighting the delays, security checks, and inconveniences they encountered. From sending money to a friend using instant payments to paying a bill online and settling a medical bill, each transaction was time-consuming and error-prone. The author questions the effectiveness of the current payment systems in place, suggesting that there is room for improvement.
The author introduces the concept of request-to-pay (R2P) as a more streamlined and efficient way to make payments. They explain how R2P would eliminate the need for customers to manually enter details, go through security checks, or use cards for confirmation. With R2P, the request for funds would be generated by the recipient and sent via a standard service to the designated R2P app, where the customer can easily approve or refuse the payment with a single authentication. This approach aims to enhance security, privacy, convenience, and overall capability for account-to-account transactions.
Account-to-account payments are on the rise globally, with experts predicting that instant payments will represent one-third of all consumer transactions by 2029. The Chief Revenue Officer for Matera, a Brazilian bank tech company, emphasizes that merchants will drive adoption of instant payment systems due to the benefits they offer. However, for this growth to materialize, there is a critical need for a Layer 2 solution to improve the security, privacy, and functionality of A2A transactions. R2P and its counterpart VRP (variable recurring payment) are seen as the essential Layer 2 elements needed for the future of payments.
The author envisions a financial infrastructure where R2P and VRP become the default way for consumers to interact with payment systems. They advocate for a shift towards a model where payments are initiated through requests rather than sending money blindly. By incorporating R2P and VRP into the payment ecosystem, customers can enjoy enhanced security measures, reduced fraud risks, and improved user experience. The article emphasizes the importance of adopting Layer 2 solutions to facilitate seamless and secure account-to-account transactions.
The potential benefits of Layer 2 solutions extend beyond individual convenience to broader industry improvements. Visa and Mastercard, among other key players, are investing in innovative payment technologies that prioritize security, efficiency, and user experience. Data Bridge Research predicts a significant surge in the adoption of instant payments, driven by merchants seeking streamlined payment processes. Layer 2 technologies like R2P and VRP are positioned to revolutionize how consumers interact with financial infrastructure, setting a new standard for secure and convenient transactions.
In conclusion, the article calls for a paradigm shift in the payments industry towards Layer 2 solutions that prioritize security, privacy, and convenience. The current challenges faced by consumers, such as delays, errors, and security checks, underscore the need for innovative approaches to account-to-account transactions. By embracing technologies like R2P and VRP, the industry can address these pain points and enable a more efficient, transparent, and user-friendly payment experience for all stakeholders. As the demand for instant payments continues to grow, the adoption of Layer 2 solutions is crucial for shaping the future of digital finance.
