In an era of constant technological progress in the financial world, A2A (Account to Account) transactions that are undergoing promising changes and becoming an important factor in the history of payment innovations.
TRANSFORMATION AND ACCELERATION
A2A payments are direct electronic transfers of funds from one account to another without intermediaries or additional payment instruments. This type of payment is not new, but used to be inconvenient to use in the past.
Bank transfers and checkbooks gave way to plastic and virtual payment cards, offering undeniable convenience. It seemed unlikely that direct A2A transactions would make a comeback. However, in recent years, they have experienced a resurgence and are rapidly gaining popularity.
A2A payments are conventionally divided into two categories: Fast and Automatic. Fast payments are often used for one-time transactions and automatic payments for recurring ones (installments, loans, subscriptions, BNPL).
Consumers are increasingly using P2P (peer-to-peer) transfers via phone number or other recipient identifiers as well as subscribing to various applications. These payment models offer the convenience and speed of direct transfers and a higher protection against fraud than with bank cards.
A2A payments could replace bank cards, especially with the convenience of Apple and Google Pay. You can scan a QR code and confirm your purchase in just a few clicks. A2A payments are also becoming more advanced, offering more benefits than ever.
WHAT ARE THE BENEFITS?
Direct payments between accounts are not only convenient, but also beneficial because of low transaction costs due to the absence of third party fees. Consumer-facing businesses also see a higher conversion rate, since users do not need to enter their card details or even have them at all to make a purchase.
HOW DO A2A PAYMENTS WORK?
A2A payments leverage financial technologies that integrate various banks through an open API. This direct bank-to-bank communication makes transactions faster and safer by eliminating intermediaries. Payments to legal entities can be auto-filled or use a QR code, while P2P transfers only need a recipient ID. These benefits make A2A payments versatile for all transactions and are gradually replacing bank cards.
NEAR-INSTANT TRANSFERS
With A2A transactions, funds can reach the seller’s account almost instantly. Different countries use various local systems for quick e-commerce payments, such as iDEAL in the Netherlands, Giropay in Germany, and QR codes globally for A2A payments.
In recent years, fintech has been transformed by open banking, QR codes, and instant transfer systems with simple recipient IDs. The imminent introduction of national digital currencies will drive further development and wider adoption of A2A payments.
Solanteq provides payment rail solutions and integrates A2A online payments with existing infrastructure through payment gateways. The SOLAR Payment Hub acts as a single orchestrator, supporting all payment methods and transaction types. It integrates quickly and seamlessly with external systems.
