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February 2025 • Issue 25:02:02

er to gain access to their banking credentials. In the United
States, rules laying out the guardrails for open banking
were put in place in October 2024 by the Consumer Finan-
cial Protection Bureau.
But in early February of this year, CFPB employees were
told to stay home and put all their work projects on the back
burner as part of a government cost-cutting move.

The changing That's not the only reason A2A will have trouble gaining
traction in the United States "Americans love their credit
cards and the rewards that come with them, so dislodging
payments the popularity of cards is perhaps the biggest challenge to
U.S. adoption of A2A," Dresner and Gandhi wrote.

landscape They estimated that A2A could handle about $200 billion
in consumer-to-business transactions by 2026; potentially
more in other types of payments. "The impact may be lim-
ited for daily transactions with a retailer or service provid-
By Patti Murphy er but larger for big-ticket and recurring payments such as
utility bills, insurance payments and more," they wrote.
hen I was in college, in the early 1970s, credit
cards were hard to come by. Once graduated, Noting that merchants like the idea of bank-to-bank pay-
the first thing most people my age did was ments because pricing is well below interchange and A2A
W obtain a store credit card. After you had one can significantly reduce fraud and chargebacks, the authors
for a time and could prove you were a good credit risk, suggested consumers may want something in return for
you could go for a regional credit card, or even Visa or foregoing credit cards – something that compensates them
Mastercard plastic. for the loss of bank rewards points. Bottom line: cards will
dominate payments, especially in the digital space, with
That was then. This is now. Today, most college students A2A payments holding a small but growing share.
carry credit and/or debit cards, and many of those are tied
to instant payment networks, like Venmo or Zelle. Plastic Paysafe: Age matters
is just so 20th century, at least for the younger generations. Card payments remain the most common way for consum-
ers to transact. Yet, responses are not cut and dried. Asked
I've reviewed several reports highlighting changes in con- for a 2024 Paysafe survey which payment methods they
sumer and merchant payment preferences. Gleaned in- used for the majority of payments, the top four vote getters
sights follow. were:
McKinsey: A2A not a slam dunk in U.S.

Account-to-account payments, also known as pay-by-bank
payments, face challenges in card-dominated markets like Contributed articles inside by:
the United States, according to a recent McKinsey & Co. re-
port authored by Andy Dresner, a partner in McKinsey's Allen Kopelman .....................................................................................16
New York office, and Amit Gandhi, an associate partner in
the firm's Atlanta office. Leo Azurmanyan...................................................................................18

Some of the challenges are regulatory in nature. An under- Monica Eaton .........................................................................................26
lying premise of A2A payments is open banking, which re- Elie Y. Katz ...............................................................................................28
quires consumers to grant permission for a service provid-

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