A2A Payments Explained: What’s Fueling Global Adoption?

A2A (account-to-account) payments are direct electronic transfers between bank accounts, bypassing card networks. They are increasingly embedded in apps and online services, using push and pull mechanisms to initiate transactions.

Countries leading A2A adoption include Brazil (Pix), the Netherlands (iDEAL), Poland (BLIK), and India (UPI). These systems are often government-backed, helping drive adoption. In 2023, A2A payments made up 7% of global e-commerce transaction value (~$449B), expected to reach 8% by 2027. They’re thriving in cash-heavy markets like Brazil and India but face slower uptake in card-dominant regions like the UK and US.

🔹 A2A Benefits

A2A offers lower costs and faster settlement. Merchants typically pay 2–3.5% for card transactions, but A2A can reduce this to a flat fee of $0.40–$0.50 per API call. It replicates card-like features (e.g., recurring payments) with instant settlement and fewer fees. Government support has accelerated adoption, especially in markets going digital.

🔹 Europe

A2A is the top online payment method in the Netherlands, Norway, Poland, and Sweden—accounting for 18% of e-commerce value in 2023. Growth is expected to be slow, reaching 19% by 2027. The European Payments Initiative (EPI), backed by the ECB, is developing Wero—a unified A2A payment system for P2P, POS, and e-commerce. It aims to offer consumers convenience and merchants a pan-European digital solution.

EPI members include: BBVA, BNP Paribas, CaixaBank, Commerzbank, Crédit Agricole, Deutsche Bank, ING, Santander, UniCredit, and others. With EU support, A2A adoption is expected to rise. McKinsey projects that, with regulatory support, 45% of SEPA’s 23B annual transactions could shift to A2A (ACH, RTGS, and instant payments).

🔹 APAC

India’s UPI is a standout A2A model—powering seamless P2P and merchant payments across banks 24/7/365. It combines bank features with push/pull payments and biometric security. UPI supports cross-border use with partners in UAE, Singapore, Nepal, and Bhutan, enabling international payments via UPI-powered apps.

🔹 MEA

In the Middle East and Africa, A2A is gaining traction via new real-time payment infrastructure. In 2023, it made up 18% of e-commerce value in the region and is projected to grow at a 17% CAGR through 2027.

🔹 LATAM

Latin America had the highest global A2A penetration in 2023—20% of regional e-commerce. Brazil’s Pix led adoption, representing 30% of online transaction value. Colombia is also seeing momentum, with A2A accounting for 25% of online spend.

Source wiseasy

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