A2A payments as a fast and secure way for financial transactions
A2A payments are becoming increasingly popular in the financial market. They simplify the payment process and guarantee a high level of security. For service providers, this option is attractive due to low commissions.
A2A is a direct form of electronic transfer. In this case, funds are sent immediately from one bank account to another. This type of payment does not require confirmation through traditional systems, thanks to which the funds arrive immediately.
There are two types of these payments:
1. Push transactions – performed by the sender in the same way as a traditional purchase.
2. Pull transactions – requested by the receiver, with the sender having to authorise the transaction and used for subscription payments.
A2As operate in the ACH format, but there has been a surge in demand for them in recent times. This is due to the spread of the open banking concept. This allows providers to connect to their customers’ bank accounts via APIs. As a result, A2A payments are rapidly gaining popularity around the world. And this trend will grow in the future, as statistics and forecasts show:
– A2A transactions account for 8% of the global e-commerce market;
– analysts expect this figure to reach 17% by 2028.
Reasons for increased interest
According to experts, the increasing popularity of RTP mechanisms, which include real-time transactions, will fuel growth. In addition, innovative solutions based on open banking and other infrastructures are driving demand for A2A.
The renewed interest in this type of payment is also due to changing approaches in the banking system. Financial institutions are trying to keep the market competitive by expanding the options available to their customers. They are introducing new solutions, including A2A-based mechanisms. This makes payments faster, more secure and less costly. Innovative banking solutions in this format include:
– A2A cheque payments;
– ACH direct debit format;
– SEPA transfers;
– Open Banking solutions available in applications through various online services.
Variations of this type of payment allow the creation of digital products that use the fintech capabilities and standard bank cards. For e-commerce merchants, such solutions are an excellent alternative to high-commission transactions. In addition, A2A can significantly speed up the process of transferring funds from one account to another.
Geography of use
Currently, this type of payment is most in demand in European countries. Demand is also growing in countries with developing economies, such as Latin America. Demand for A2A payments is increasing in the APAC region.
At the same time, such payments are less common in Canada, the UK, the US and Japan. This is due to the established system of bank card usage among the population in these countries.
