The author discusses their recent experiences with making payments and highlights the inefficiencies, inconveniences, and errors they encountered. From delays with instant payments to the cumbersome process of paying bills and medical expenses, the author argues that the current payments system is flawed and in need of improvement. They emphasize the need for a request-to-pay (R2P) system that would streamline the process, enhance security, and ensure privacy for account-to-account transactions. The author envisions a Layer 2 infrastructure where payment requests are verified by banks before being sent to the recipient, reducing the risk of fraud and human error.
Account-to-account payments are on the rise globally, with instant payments expected to account for a significant portion of consumer transactions by 2029. The author cites the potential for merchants to drive adoption of streamlined payment systems, as evidenced by the interest from major players like Visa and Mastercard. However, the success of instant payments hinges on the development of Layer 2 technologies like R2P and variable recurring payments (VRP) to enhance security, convenience, and capability for A2A transactions. Moving towards a default system of R2P for consumer interactions would eliminate surprises and ensure a smoother payment experience for all parties involved.
The author’s experiences with making various payments highlight the current shortcomings of the payments industry, prompting a call for innovation and advancement in payment technologies. By implementing a Layer 2 infrastructure with R2P and VRP systems, the author envisions a future where payments are more secure, efficient, and user-friendly. With merchants driving the adoption of instant payments and data indicating a growing trend towards A2A transactions, the need for a more robust and reliable payment system becomes increasingly apparent. It is essential for the industry to embrace new technologies and improve the overall payments experience for consumers and businesses alike.
The potential benefits of a Layer 2 payment system extend beyond individual transactions, with implications for fraud prevention, privacy protection, and overall customer satisfaction. By simplifying the process of making payments and incorporating advanced security measures, Layer 2 technologies like R2P and VRP have the potential to revolutionize the way people interact with financial infrastructure. The author’s vision of a future where payment requests are seamlessly verified, authenticated, and processed underscores the need for continuous innovation in the payments industry. As account-to-account transactions continue to gain traction, the development of Layer 2 technologies will be crucial in shaping the future of digital payments worldwide.
