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October 14, 2024 • Issue 24:10:01

Pay by bank seeks U.S. market position

viding high-speed payment rails that help drive A2A pay-
ments. They accounted for $525 billion in global ecommerce
transactions in 2022, up 13 percent over 2021, when the tally
was $463 billion.

In the United States, A2A accounted for 9 percent of ecom-
merce transactions in 2022. A2A is projected to grow to 11
percent by 2026, fueled in part by FedNow, the real-time
payment network launched in 2023 by the Federal Reserve,
and continued growth of RTP, the real-time network oper-
By Patti Murphy ated by The Clearing House.

ay by bank. Account-to-account transactions. More recently, the FIS Global Payments Report 2024 revealed
Bank-to-bank payments. The nomenclature may that A2A payments are gaining much faster in developing
differ, but not the process: it's all about moving markets, where card payments are not entrenched, and
P money from a buyer's bank account to that of a where A2A networks receive strong government support
seller. as a means of promoting financial inclusion.
This latest trend in payments is being ushered in by several In Poland, blik, a privately operated A2A network owned
factors, including the introduction of real-time payments, by six local banks and Mastercard handled 68 percent of
the development of open banking infrastructure, and mer- that nation's ecommerce transaction value in 2023 and is
chants' ongoing quest to broaden payment acceptance op- projected to handle 73 percent by 2027.
tions while also reducing payment acceptance costs.
Volt, a real-time payments platform based in London, re-
Open banking establishes standards for sharing consumer cently revealed it is working with Farfetch, an online mar-
financial data with financial institutions and third-party ketplace for luxury fashions, to make a pay-by-bank solu-
fintechs through application programming interfaces. The tion available to consumers in the UK, Germany and the
APIs enable secure transmission of payment instructions Netherlands. "We believe that real-time payments have a
and authorizations between FIs and third parties. transformative potential for retail," said Kat Marangos, vice
president for strategic accounts at Volt.
The Consumer Financial Protection Bureau plays a key role
in open banking standards, under authority granted by Overcoming obstacles
the 2010 Dodd-Frank Act. The consumer watchdog agency
voiced concerns that current data sharing arrangements be- "A2A payments have found much less success in the UK
tween FIs, third parties and consumers often lack a means and USA.," FIS' 2024 report noted, even though merchants
for verifying consumer consent. "crave A2A's lower cost of payment acceptance." The prob-

Earlier this year, the CFPB offered a proposed rule that
addresses these concerns. For example, it sets criteria for
standards-setting bodies, and the types of data that can be Contributed articles inside by:
made available (for example, a consumer's transaction his-
tory and rewards credits). Allen Kopelman .....................................................................................16
By the numbers Ken Musante ..........................................................................................24
Edvards Margevics ...............................................................................26
The FIS Global Payments Report 2023 revealed that there
were almost 70 real-time payment schemes worldwide pro- Elie Y. Katz ...............................................................................................28

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