10/29/2023

Accelerating Account-to-Account Transfers via Real-Time Payments

PYMNTS

The rising popularity of A2A payments does not necessarily make them a perfect fit for all use cases. Both businesses and consumers have grown frustrated by many of A2A payments’ limitations, including transaction limits and susceptibility to fraud.
• While A2A payments have gained prominence worldwide, their adoption in the U.S. has lagged. Americans, it appears, prefer faster payment methods such as peer-to-peer (P2P) apps to the slower, costlier alternative.
• Real-time payments have become incredibly popular over the past several years as the pandemic pushed payments online and businesses and consumers clamored for faster transactions. Accelerating A2A payments into real-time transactions could boost this channel’s popularity.

Account-to-account payments involve direct electronic fund transfers between two bank accounts, skipping the usual intermediaries like credit cards or escrow services. As digital banking becomes more ubiquitous, A2A transfers have seen increased adoption in recent years, accounting for $525 billion in eCommerce transaction volume in 2022.

In the U.S., however, A2A payment rails have been slow to gain traction due to factors such as sluggish processing times and the entrenchment of existing payment tools like credit cards. Accelerating these transfers by establishing real-time payments rails could set a new dynamic for A2A payments in the U.S., potentially bringing wider adoption.

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