Consumer A2A payments – 186 Billion transactions globally by 2029
A new study from Juniper Research has found that the volume of global transactions via A2A (Account-to-Account) payments will rise from 60 billion in 2024 to 186 billion by 2029; an increase of 209%.
A2A payments, which are bank-to-bank transfers that do not require intermediaries, have gained global traction in recent years, as instant payment methods have become commonplace. A2A has gained an advantage over other payment methods, with instant settlements and cheaper transaction fees than cards increasing its desirability to merchants.
Open Banking Innovation Driving A2A Progress
The report found that Open Banking developments have enabled the proliferation of A2A solutions. Notably, Variable Recurring Payments (VRPs), an A2A-specific solution in which customers connect authorised payment providers to their bank account, facilitate agreed recurring payments on the customer’s behalf, within set limits. Consequently, businesses and banks have grown interested in VRPs due to their increased flexibility and transparency compared to direct debit.
Research author Matthew Purnell remarked: “VRPs provide a service not easily replicable beyond A2A, boosting A2A’s potential. Vendors must capitalise on this opportunity and offer merchants A2A-specific solutions that enhance consumer payment experiences like VRPs, improving satisfaction and rewarding repeated payments.”
Instant Payments Enabling A2A Growth in Card-dominated Markets
The research found that instant payment roll-outs are creating A2A-based opportunities, even in traditionally card dominated markets like the US. For example, FedNow, the US’s most recent payment rail which launched in 2023, has an average transaction fee of 4 cents; this makes this solution advantageous when compared to cards, with an average fee of 3.5% per transaction. Therefore, as adoption grows and use cases multiply, cost-efficient A2A payments are likely to disrupt the card-dominated US market.
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An extract from the new report, Global A2A Payments Market: 2024-2029, is now available as a free download.
