Account-to-account (A2A) payments
Also known as: A2A payments, pay by bank, bank transfer payments, account-to-account transfer
Account-to-account (A2A) payments move money straight from one bank account to another without going through a card network, using systems like Interac e-Transfer, UPI, Pix, or open banking 'pay by bank.' While A2A is often promoted as the cheaper, faster replacement for cards, it typically lacks the chargebacks and fraud guarantees that make cards trusted.
That trade-off decides how far it spreads.
Account-to-account (A2A) payments, explained at three levels
At home
An account-to-account payment is like handing cash directly from your wallet to someone else's, with no middleman taking a cut. Instead of going through a card network such as Visa, the money moves straight from your bank account to theirs. When you send an Interac e-Transfer to a friend, or approve a 'pay by bank' payment in your banking app, that's A2A. No card number is involved at any point.
At work
Account-to-account payments move money directly between bank accounts over bank payment rails, such as Interac e-Transfer, Pix, UPI, or UK Faster Payments, instead of card networks. For a business, A2A can mean lower fees and faster settlement than cards, because no interchange is charged and funds often arrive instantly. The trade-offs are weaker refund and dispute tools and customers who are used to their card rewards.
At home
A2A payments are 'push' payments: you instruct your bank to send money, rather than giving a merchant your card number so it can 'pull' the money. At an online checkout, 'pay by bank' usually redirects you to your banking app through open banking, where you approve a payment already filled in with the amount and payee. That's safer in one way, since there's no card number to steal, but riskier in another: if you're tricked into sending money to a scammer, you usually lack card-style chargeback rights.
At work
A2A at checkout combines a payment rail, such as an instant payment system, with an initiation layer that starts the payment. In the UK and EU, licensed payment initiation providers use open banking APIs to create the payment and send the customer to their bank to approve it. Request-to-pay messages let a business send a bill the customer approves, and the UK's variable recurring payments allow ongoing payments within set limits. Refunds are separate push payments back, rather than reversals, which merchants must handle themselves.
At home
Card payments include a built-in dispute system, paid for through interchange fees, that lets your bank pull money back from a merchant. A2A rails mostly lack that, because a push payment you authorized is final once it settles. That's why fraud reimbursement has become a regulatory issue. While some argue reimbursement encourages carelessness, in my opinion the UK's mandatory rules are the model to watch: they shift the cost of scams onto banks, which pushes banks to invest in better scam detection.
At work
A2A economics depend on the rail and the layer above it. Instant rails such as UK Faster Payments, Pix, or Canada's coming Real-Time Rail move the money cheaply, while payment initiation providers, refund handling, and confirmation of payee add cost and complexity. Without interchange, there's no pool to fund rewards or chargebacks, so in card-reward markets A2A providers need merchant-funded incentives to compete. It fits best for high-ticket, low-margin, or recurring payments, where card fees hurt most.
Real-world examples
At home
Fatima paid her annual car insurance premium using 'pay by bank' on the insurer's website. She approved the payment in her bank's app, and the insurer received the full amount instantly without a card fee.
At work
Jerome runs finance for a UK-based online furniture store. He added a pay-by-bank option for orders over £1,000 and offered a small discount to encourage it. Card fees on big orders dropped, and payments arrived instantly instead of days later.
How it compares
| feature | Account-to-account (A2A) payments | Card payments |
|---|---|---|
| How money moves | Directly between bank accounts | Through card networks |
| Merchant cost | Usually lower | Interchange plus fees |
| Settlement | Often instant | Typically one to two days |
| Consumer protection | Limited, varies by country | Chargebacks and fraud guarantees |
| Rewards | Rare | Common on credit cards |
A2A is cheaper and faster, while cards still win on protection and rewards.
For analysts
A2A is a cost lever, but adoption needs a reason for the customer. I'd target large-ticket and recurring payments first, and test a modest incentive. Asking customers to give up card rewards for nothing rarely works.
History & origin
Bank-to-bank transfers are old, but they were slow and mostly used for bills and payroll. Real-time rails changed that, starting with the UK's Faster Payments Service, launched in May 2008. India's UPI (2016) and Brazil's Pix (2020) proved that A2A could dominate everyday spending. In the UK and EU, open banking added payment initiation, letting apps and merchants trigger A2A payments directly. The UK required major banks to support variable recurring payments for 'sweeping' between a customer's own accounts in 2022, and introduced mandatory reimbursement for authorized push payment fraud in October 2024. In my view, A2A will grow fastest where governments build cheap rails and slowest where card rewards keep consumers loyal, which is a fair description of North America.