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Cards vs Account-to-Account Payments


9 min read

Running an online business demands constant adaptation to new market trends. 

Suppose your business involves receiving payments for goods or services. In that case, you’re likely familiar with the challenges linked to traditional bank cards, transferring money, delays, and intermediary service fees.

In this article, we’ll explore a promising alternative to conventional cards — Account-to-Account payments. This digital payment method is gaining traction because of Open Banking advancements (technology that enables secure access to banking data through APIs). 

With the age of cash transactions fading, there’s a growing need for a modern and effective choice, and this solution claims to be the one. 

Recent research predicts a remarkable 80% surge in non-cash payments by 2025. For businesses not offering cashless options, this could mean losing customers or even shutting down in the near future.

Operating under PSD2 requirements, this approach not only enhances security, protecting your business from fraud risks and excessive fees but also ensures a smooth and efficient process. Account-to-account payments aim to make purchasing goods and services more seamless for your clients and more cost efficient to you.

In this article, we don’t just explain account-to-account (A2A) payments; we also break down the advantages and disadvantages, comparing them to card payments. Let’s explore this payment solution and understand how it can reshape your business transactions.

Card Payments 

Card payments are a universal method of financial transactions involving physical or virtual cards linked to a bank account. These transactions enable the seamless exchange of funds between customers, financial institutions, and businesses.

How Card Payments Work?

  1. Financial institutions, on behalf of businesses, establish the capability to accept card payments by deploying a point-of-sale (POS) system for physical stores or integrating an online payment gateway for virtual transactions. 
  2. Online businesses integrate a payment gateway into their platforms, allowing customers to input card details during checkout. Users authenticate transactions online using one-time passwords (OTPs) or security codes, ensuring the security of their card details. 
  3. The gateway securely processes the transaction. Card transactions come with associated fees, including interchange fees and service charges. Businesses navigate the variability in these fees, which impacts the overall cost of accepting card payments.

Account-to-Account Payments 

Account-to-account payments, also known as open banking payments, are a simple alternative to traditional card payments. Independent of card systems, this method is a straightforward addition to merchants’ payment options (any business providing the paid type of service and determined to accept payments). 

Unlike the traditional card payment process that involves many steps, A2A payments simplify things.

How A2A Payments Work?

Thanks to changes in the European Union’s payment rules (PSD2), businesses can now check customer banking account data in real-time, catching possible issues like money laundering without making customers go through extra steps during online checkout. This set of regulations brings new ideas and makes paying for goods and services more secure.

As I mentioned before, A2A payments serve as a growing alternative to card transactions. Also known as bank-to-bank payments, direct account payments, or online banking payments, they manage funds transferring directly between bank accounts. They’re widely used in e-commerce and are a practical solution for personal fund transfers. 

But how does this method exactly work?

  1. No card required. Users can forget about using their card details for A2A payments. Now, people only need to enter their bank details once to make transactions happen directly between their bank accounts.
  2. Special apps or platforms. A2A payments usually work through banking APIs, letting customers make transactions on specific apps or platforms that support this tech.
  3. Use your bank. A person simply enters their bank account to conduct A2A payment. This is a secure process, ensuring the app has all the required information for the transactions.
  4. Secure authorization. When a user wants to make a payment, the A2A payment service securely communicates with the bank, allowing the transfer of funds. And no worries, it keeps the user’s card details safe.
  5. Money transfers. Customer’s money goes straight from its bank account to the recipient’s (merchant). It’s like a digital handshake between the banks, ensuring the cash reaches the right place.
  6. Updates and confirms. The user gets real-time notifications and confirmations through the app or platform. Hence, all sides stay in the loop about your transactions, keeping things clear and secure.

Open Banking Driving the Future of A2A Payments

A2A payments are directly dependent on Open Banking, a game-changer for businesses. It is a technology that allows fintech to share their APIs with third parties to make the creation of new apps and services more accessible. The shared data includes the account holder’s name, account type, currency, account open date, transaction details, etc.

So, when customers make a purchase, they can pay straight from their app accounts, skipping the credit or debit cards step. It’s quick and easy — no more typing in bank details or dealing with extra fees.

For businesses, Open Banking means smoother transactions and a better customer experience.

Transform your payments now.

Types of Account-to-Account Payments

A2A payments come in two types: push payments, where the payer initiates the transfer, and pull payments, where the receiver withdraws the money.

  • Push payments are similar to one-time manual transfers from one account to another. As a business, you want to receive payments from your customers swiftly and securely. Push payments allow you to initiate these transactions seamlessly.

For your customers, it means they can make quick one-time transfers from their bank accounts to yours. This is particularly handy for purchasing products or services. Unlike traditional card payments, there’s no need for customers to enter card details. It simplifies the payment process for them.

Behind the scenes, APIs (Application Programming Interfaces) act as connectors between different systems. They enable your business platform to communicate effectively with your customer’s bank and get real-time updates about this transaction.

  • On the other hand, pull payments occur when businesses withdraw money from customers’ accounts. This is useful for regular bills like phones or electricity. However, financial institutions need customer approval for such transactions, and this permission is obtained through a direct debit order, ensuring the agreement between two parties. 

Benefits for A2A Payments

A2A payments provide advantages for different segments of the market and industry, so let’s explore them in more detail:

For Businesses

#1. Cost-Effective Transactions

Open bank payments cost less than traditional methods, avoiding transaction-related fees from card schemes or interchange fees.

#2. Speeding Up Agreements

Open bank payments hit merchant accounts in seconds or minutes, helping businesses boost cash flow quickly.

#3. Innovative Payment Approaches

A2A payments cut down on time-consuming data entry hassles. Consumers authorize payments directly in their bank apps, often with seamless app-to-app redirection and biometric ID.

#4. Improved Conversion Rates

A2A payments boast success rates equal to or higher than card payments. Secure user authentication through banking apps reduces errors and increases success rates. Bank accounts, unlike credit cards, don’t expire.

#5. No Chargebacks

Open bank payments eliminate chargeback processing costs and fraud, providing businesses with more financial services stability.

#6. Enhanced Security

Account transfers ensure bank-level security. A2A payment companies connecting with banks via API minimize data breaches and mobile hacks.

#7. Access to More Information

Instantly check real-time bank balances and up-to-date customer transaction data from banks.

#8. Reduced Risks

A2A Payments don’t expose or store cardholder info or login details, immediately putting customers’ financial information into their banking apps.

#9. Simplified Reconciliation

Token-enabled open bank payments streamline incoming cash distribution, making reconciliation faster and easier compared to manual invoicing and bank transfers.

For Customers

#1. Better Money Management

Open bank payments offer a clear and open view of your money, helping you make smarter spending choices and manage your finances more effectively.

#2. Faster and Easier Transactions

When you let businesses access your bank info, you can quickly fill out forms and get verified for transactions, making the whole process more convenient.

#3. One-Click Secure Payments

With A2A payments, you can securely confirm purchases right in your banking app. It often includes smooth transitions between apps and biometric ID for added security.

For Banks

#1. Boosting Income from Payments

Open banking helps banks create new ways to earn money by developing data-driven products and services.

#2. Enhancing Customer Relationships

Open banking allows banks to regain their central role in payments and become the backbone of their customers’ lives.

#3. Strengthening Business Partnerships

Open banking simplifies day-to-day business banking, saving time for trade and corporate customers. Banks can enhance their relationships with businesses by providing a unified view of all bank accounts (multibanking).

#4. Enhancing Credit Assessment

Open banking enables banks to create a more thorough credit assessment by considering all bank accounts and corporate activities.

How to Create A2A Payment Solutions with DashDevs?

Lately, we had a merchant client looking for ways to boost sales. We suggested crafting an A2A payment solution tailored to his business needs. With dedication and expertise, we brought this solution to life. The result? A delighted client who, within a few months, showcased a remarkable surge in revenue — all thanks to the A2A payment solution we co-created.

Hence, whether you are a startup, an established business, or a merchant, we can provide a full scope of tailored software development services to streamline your payment processes.

How DashDevs can transform your A2A payments:

Customized software development

  • Tailored solutions. Our team crafts customized software solutions for A2A payments that align with your business’s unique needs and goals.
  • User-friendly interfaces. We prioritize creating intuitive interfaces to ensure seamless user experiences for businesses and clients engaging in A2A transactions.

Optimizing business operations

  • Efficiency boost. The A2A payment software we can build optimizes business operations by facilitating faster, more cost-effective transactions. This efficiency is paramount for enhancing your bottom line.

Navigating regulatory landscape

  • Expert guidance. DashDevs provides specialist advice on the regulatory requirements for A2A payments. While we excel in developing robust software, obtaining the necessary licenses for fund transfer services is a parallel work we guide you through.

Collaboration for success

  • Bank transfer facilitation. Recognizing the importance of bank transfers, we collaborate with institutions that specialize in facilitating these transfers. This ensures that your A2A payment solution adheres to regulatory standards.

Tailoring to country-specific needs

  • Licensing adaptability. We acknowledge the diversity in licensing requirements across countries. DashDevs navigates this complexity by tailoring solutions to comply with the specific licensing demands of your operational region.
Explore A2A advantage now.

The Future of A2A Payments

Looking ahead, account-to-account payments are on the rise. While they have yet to reach their peak, this payment method is expected to make up 20% of European e-commerce buys by 2023, outpacing card payments. This surge in popularity is evident as over 60% of mobile banking customers express openness to A2A payments.

It’s clear that consumers want payments to be faster, but they also crave simplicity and security. Unlike A2A payments, card payments haven’t seen the same progress and innovation, making them outdated and less favored by customers. 

However, right now, there’s no one-size-fits-all global payment system. Each country or region should have its own solution for setting up account-to-account payments. Some central banks have recently initiated programs to build these A2A payment systems.

Consider the Netherlands, for instance. They’ve created regulatory sandboxes to encourage the development of new and innovative solutions. The aim? Get more people interested in and using these new payment systems. 

iDEAL, a big player in the Netherlands market, — a super popular online payment system making up 65% of all e-commerce transactions. It became a hit with the arrival of SCT (instant payment). Real-time payments are catching on in the Netherlands and are expected to grow even more in the next few years.

Simultaneously, banks worldwide strive to gain more control over payment systems, reducing dependence on traditional giants like Visa and Mastercard. Initiatives such as the European Transfer Initiative (EPI) are underway to create a fresh payment setup for seamless fund handling across accounts. 

Open Banking is pivotal in this transformation, allowing new players like Trustly and Token to enter the A2A payment industry. As a result, account-to-account payments are becoming the foundation for the emergence of diverse payment service styles, including QR codes, payment wallets, buy-now-pay-later (BNPL) options, cryptocurrencies, and stablecoins, contributing to their increasing popularity.


The payment game is heading towards a “cardless” setup. While businesses holding onto card profits are a bit wary of pushing new payment methods, it seems like change is on the horizon. 

Open Banking and similar accelerators are promoting transformation, and it looks like banks, merchants, and customers will hop on the trend. To deal with the rise of A2A payments, card networks are already broadening their product range through some savvy enhancements.

Want to know more about what open banking payments could mean for you and your business? Get in touch.

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Table of contents
What is the main difference between cards and account-to-account (A2A) payments?
The primary difference lies in the way transactions are processed. Cards involve using a physical or virtual card linked to a credit line, while A2A payments directly transfer funds between bank accounts.
How do "buy now, pay later" options differ between cards and A2A payments?
"Buy now, pay later" is often associated with credit cards. However, with A2A payments, certain services may allow deferred payment, but the process is typically more straightforward, directly debiting the amount from your bank account.
Are peer-to-peer (P2P) payments more secure with cards or A2A transactions?
Both options can be secure, but P2P payments in A2A transactions often leverage bank-level security, providing an additional layer of safety compared to sharing card details.
Can I link my bank account for transactions in both card and A2A payments?
Yes, you can link your bank account for transactions in both cases. However, A2A payments inherently involve direct transfers between bank accounts, making it a more seamless process.
What are the types of account-to-account (A2A) payments available?
A2A payments encompass various types, including regular bank transfers, instant payments, and innovative options like QR codes, payment wallets, and other emerging methods. These options provide a versatile range for different user preferences.