For decades, card networks held near-absolute dominance over electronic payments. If you wanted to accept money digitally, you needed Visa, Mastercard, or one of their regional equivalents. That dominance is now being challenged in a fundamental way by account-to-account (A2A) payments — direct bank-to-bank transfers initiated through open banking APIs, with no card network in the middle.
The shift is already well underway. In the United Kingdom, open banking-powered payments grew by over 70 percent in 2024. In Brazil, Pix — the central bank's instant payment rail — has processed billions of transactions since launch. In the European Union, PSD2 mandated bank API access, creating the regulatory foundation for a new generation of payment products. The infrastructure is here. What matters now is how businesses use it.
What Open Banking APIs Actually Do
Open banking APIs give licensed third-party providers — including payment platforms, accounting software, and lending services — the ability to access bank account data and initiate payments on behalf of account holders. Critically, this access requires explicit user consent. The bank must make the API available, and the account holder must authorize each connection.
There are two primary API categories relevant to payments:
- Account Information APIs — provide read access to balance and transaction data. Used for underwriting, financial management tools, and identity verification.
- Payment Initiation APIs — allow authorized parties to push payments directly from a bank account. This is the infrastructure that powers A2A payments.
When a business uses a payment initiation API to collect a customer payment, the flow looks like this: the customer authorizes the payment in their banking app, and the funds move directly from their account to the merchant's account through the local bank rail. No card data is transmitted. No card network fee applies. No chargeback risk exists in the same form it does for card transactions.
Why A2A Payments Are Attractive for Businesses
The business case for adopting A2A payments alongside or instead of card acceptance is primarily economic. Card acceptance fees typically run between 1.5 and 3.5 percent of transaction value for most merchants, depending on card type and processing arrangement. A2A payments via open banking rails cost a fraction of that — often a fixed fee per transaction rather than a percentage of value.
For high-volume or high-value businesses, this difference is material. A company processing $10 million per month in payments at 2 percent card fees is paying $200,000 per month in acceptance costs. If A2A payments can handle even 40 percent of that volume at significantly lower cost, the savings run to tens of thousands of dollars monthly.
Beyond cost, A2A payments offer advantages in settlement speed and certainty. Because funds move directly between accounts on domestic rails, settlement is often near-instant for supported corridors. There is no waiting for card settlement cycles, and the reduced chargeback exposure simplifies reconciliation.
The Cross-Border Dimension
The most exciting development in open banking for international businesses is the emerging effort to connect national open banking frameworks across borders. The G20's cross-border payment roadmap explicitly calls for interoperability between fast payment systems. Projects like Project Nexus, which aims to connect ASEAN fast payment systems, are building the rails that will allow A2A payments to function across currency and jurisdiction boundaries.
Paymonx's PayAPI is designed to sit at the intersection of these networks. By connecting to local fast payment rails in each supported country and providing a unified API layer over them, PayAPI allows businesses to initiate payments that look and feel like domestic transfers to the recipient, regardless of where the sender is located.
What to Consider Before Adopting Open Banking Payments
Open banking payments are not a universal replacement for cards, and businesses should approach adoption strategically. Key considerations include:
- Geographic coverage — Open banking APIs vary significantly by country. Coverage is strongest in the UK, EU, and parts of Asia. Coverage in the US and many emerging markets remains fragmented.
- User experience — A2A payment flows require the user to authenticate through their banking app, which adds steps compared to card checkout. Conversion rate testing is important before full rollout.
- Refund and dispute handling — The A2A ecosystem lacks the standardized dispute framework that card networks provide. Businesses need clear refund policies and processes in place.
- Regulatory compliance — Payment initiation is a regulated activity in most jurisdictions. Businesses should use licensed infrastructure providers rather than attempting to build direct bank connections independently.
The trajectory is clear: open banking and A2A payments will account for a growing share of business and consumer payment volume over the coming years. Businesses that understand the infrastructure now will be better positioned to capture the cost and speed advantages as coverage expands.