Podcast 167: Pay by Bank Is Coming for Cash, Not Cards, with Johannes Kolbeinsson

Everyone assumes account-to-account payments are coming for cards. Johannes Kolbeinsson, Co-Founder and CEO at Paystrax and a card acquirer with over 20 years in the business, argues the opposite: A2A’s real target is cash — and it is still losing to cards because it simply takes too many steps.

In this episode of the Fintech Garden Podcast, he walks through why pay by bank has not broken through the way the industry keeps predicting, how friendly fraud is quietly reshaping merchant incentives, and why a parallel banking system is forming around stablecoins.

Why account-to-account payments still haven’t broken through

A card payment is one step, maybe two with 3D Secure. An account-to-account payment can run three to six steps before it clears.

Johannes says that gap — not a lack of ambition from Visa and Mastercard’s competitors — is why A2A has not gained the traction the industry keeps forecasting. His own acquiring business offers an A2A option to merchants. Roughly 90% still choose to stick with card rails.

The implication for product leaders is blunt: if your A2A flow still feels like a multi-screen journey, you are not competing with cards on convenience. You are competing with cash on corridors where cards never won.

Friendly fraud is quietly pushing volume away from cards

Johannes points to a specific and growing problem: chargebacks filed by customers who received what they ordered but claim otherwise anyway. His company’s own research found people under 30 treating this “as a sport.”

He argues card schemes are responding by penalizing merchants rather than fixing the actual loophole — and that misstep is pushing volume toward account-to-account rails, where chargebacks are not possible.

For ISVs and merchants, that is not an abstract dispute policy debate. It is a unit-economics signal: when friendly fraud and scheme penalties climb, the relative attractiveness of A2A changes even if consumer UX has not caught up yet.

A parallel banking system is forming around stablecoins

Paystrax recently launched USDC stablecoin settlement across 17 jurisdictions. Johannes is blunt about where the technology is ready — and where it is not.

Stablecoin payments at the point of sale are likely three to five years out. Peer-to-peer and cross-border transfers are moving to stablecoins much quicker. In his words, a new banking system is being built alongside the traditional one.

That split matters for roadmap planning: do not wait for POS stablecoin checkout to start designing treasury and cross-border settlement paths that already work.

20+ years of payment cycles, and where this one is headed

Johannes has been in payments long enough to watch the industry panic about a new “disruptor” every few years — from telecoms entering payments in the mid-2000s to PSD2.

His take on the current cycle: card schemes will keep growing because of the decade of investment behind consumer trust and protection, and today’s anxiety about payment sovereignty is overstated given how much of the card ecosystem’s revenue already stays in Europe.

The through-line of the episode is calibration, not hype. Cards still win on steps and trust. A2A wins where cash still dominates or where chargeback pain is unbearable. Stablecoins are building a parallel rail for settlement and corridors — not an overnight POS replacement.