Account-to-Account (A2A) Payments: All You Need To Know

If you’re looking to implement A2A payments in the UK and Europe, you may be experiencing the following:

You’re being charged high fees from traditional payment methods, such as Visa or Mastercard, which are impacting your profitability.
Your current payments provider has limited geographical coverage, and you want to expand into new regions.
You want a reliable payment solution that is enterprise-ready: it can securely handle large volumes of transactions.

At Yapily, we offer account-to-account (A2A) payments via open banking. This means you can provide your end customers with secure A2A payments that settle in seconds without the high costs associated with card processing.

As account-to-account payment experts, we know how important a cost-efficient alternative to card payments can be to many industries.

In this article, we’ll cover:

Looking to offer account-to-account payment services to your end-customers? Discover Yapily’s open banking solution. Speak with one of our experts today.

What you need to know about A2A payments in open banking

Account-to-account payments are a direct transfer of funds between two bank accounts without any intermediary, bypassing payment cards completely.

People often confuse open banking with A2A payments. It helps to think of A2A payments as the actual transfer of funds. This could be via the payment rails of one country for domestic payments, or between different payment rails of specific countries for international payments.

Open banking is the technology that enables payments to be made from one account to another. It provides the automatic access of data between two parties. With the account holder’s consent, open banking grants access to the account holder’s data and the ability to initiate payment.

The two types of A2A payments

A2A payments can happen in two ways.

1. Push A2A payments

This is when the customer initiates a payment, pushing the payment from their preferred banking platform to the recipient of their choice. Push payments are usually single, one-time payments.

Take a marketplace transaction as an example. When the customer wishes to purchase a product and selects a bank transfer, they can authorise and push the payment there and then or on a scheduled date.

2. Pull A2A payments

Pull payments happen when a customer authorises a business to pull variable or non-variable recurring payments directly from the customer’s bank account. These transactions could happen on a fixed date or schedule and are more common for variable recurring payments.

Utility bill payments often happen via pull A2A payments. For example, when a customer changes their energy provider, they usually set up the recurring variable bill payment authorisation when starting their energy contract. This allows the energy provider to pull payments automatically.

What are the advantages of open banking A2A payments?

Account-to-account payments through open banking provide a few key benefits for you as a payment service provider (PSP) and for your end customers.

1. Lower transaction costs, which provide greater margins

A2A payments through open banking typically have lower fees than credit cards or direct debits.

Open banking A2A payments operate on Fast Payment rails, eliminating the reliance on expensive card networks. This cost-saving enables businesses to retain more revenue and increase their margins, especially when handling large volumes or high-ticket transactions.

2. Improved customer control over the payment process

With open banking A2A payments, customers have greater control because they can see their authorisations within their online banking platform or mobile app and can stop automatic payments at any time.

Open banking also makes it easier for customers to complete purchases. With payment initiation automating the process, customers no longer have to scramble to find their credit card details or rely on slower, traditional A2A transfers. Compared to both cards and non-open banking A2A payments, open banking allows for faster, more seamless checkouts, giving customers an effortless and frictionless experience.

An improved payment experience can help reduce payment drop offs, boost conversions, and increase customer retention.

3. Near-instantaneous transfers with real-time updates

A2A payments via open banking happen through dedicated payment rails, such as Faster Payment in the UK and SEPA (and SEPA instant) in the EU, which enable near-instant transfers of funds, benefiting both businesses and end customers.

Businesses can access funds immediately, helping to maintain cash flow. Customers benefit from a faster release of the purchased service or shipment of goods. Speedy settlements can also encourage repeat purchases.

Open banking A2A payments also enable real-time updates on payment status, ensuring the parties involved can easily track initiation and settlements.

4. Reduces fraud risk thanks to Strong Customer Authentication (SCA)

Since account to account payments requires authorisation from the payer, they can help reduce fraud risk and late payments.

A2A payments also don’t store user credentials or passwords, enabling a safer and more secure experience. End-customers just need to authenticate themselves via SCA to grant access to their data.

Businesses can also avoid chargebacks because A2A payments require the customer’s consent. So there’s less risk of customers changing their minds and requesting a refund through their card issuer.

Top A2A payment use cases

A2A payments can be a great payment solution for PSPs with end-customers in the following industries:

E-commerce: Credit card payments are common in ecommerce but carry a high cost for merchants, chargeback and fraud risks, and manual reconciliation.

With A2A open banking payments, merchants can enjoy lower fees and instant settlements with real-time updates. Also, these payments are more secure than traditional card payments, as they require the customer’s consent, helping to reduce fraud and (subsequently) chargebacks.
Remittance. This industry often faces high fees, long settlement times, and security risks. By leveraging open banking, remittance platforms can reduce the costs associated with the funding phase, where users add money to their accounts before the transfer. This provides a more secure and seamless onboarding process for all parties involved.

While the actual remittance transfer still occurs through traditional channels, open banking optimises the initial steps by allowing PSPs to access financial data and personalise offers, enhancing the overall customer experience.
Digital assets. Crypto platforms deal with a lack of trust because of security concerns and expensive, slow payment options (cards or wire transfers). This delays exchanges on time-sensitive trading opportunities and creates high fees, which diminishes the crypto value.

A2A payments via open banking can reduce fees and provide more security when adding fiat currency to user accounts. This makes it easier for customers to buy crypto, while also enabling instant settlements. With open banking, users can fund their accounts more quickly and securely, allowing them to trade crypto or withdraw funds instantly.
Taxes and public-service fees. Payment limitations here include legacy systems, which are cumbersome and error-prone – risking late payments and fines – and credit card payments, which are expensive. These systems also lack real-time updates, making customers question payment success.

With open banking A2A payments, public administration entities can pre-fill information fields in PIS so customers can experience fewer mistakes, have instant payments at a reduced cost and with real-time status visibility, and access identity verification to validate bill payments more efficiently.
Lenders. Lending platforms need data to make the right decisions before issuing credit. With open banking account information services, they can check a potential customer’s data safely to determine their financial health before offering credit. Then they can both issue credit and enable repayments through open banking A2A payments for instant settlements, more cost-efficient transactions, and a smoother experience for the borrower.

Wondering how else open banking can improve your payment processes? Check out this article on 20 open banking use cases.

Why use Yapily for open banking A2A payments

Yapily provides A2A payments via open banking and is a pioneer in offering payment initiation for single payments, variable recurring (including cVRP), and bulk payments.

Here’s what you get when you use Yapily for your open banking A2A payments:

Save on high transaction fees and get more visibility on your payments (with real-time tracking)

Tired of high transaction fees cutting into your profits? If you’re accepting credit card payments, you can expect to face processing fees between 1.5% and 3.5%, with some fees climbing as high as 6%¹. These fees can quickly add up, significantly affecting your margins, especially if you’re processing large payment volumes.

And while traditional A2A payments offer much lower fees than card transactions, there have some drawbacks. Settlement times can be slow, leaving you unsure when funds will actually arrive. Imagine waiting days to receive your payments while trying to manage operational costs or fulfil orders: that’s cash flow uncertainty you don’t need.

But with open banking A2A through Yapily, you can save on transaction fees and speed up your payments. We offer real-time tracking, so you’ll know exactly when a payment is initiated and when it settles. This enhanced visibility helps you stay on top of cash flow and saves you from having to guess when the funds will arrive.

Using the power of open banking, Pleo, a business spend management platform, was able to reduce transaction fees and improve payment efficiency. By integrating Yapily’s real-time payment capabilities, Pleo allowed their finance teams to top up accounts instantly across Europe, removing the delays caused by manual processes and improving overall cash flow visibility. As a result, 80% of Pleo’s customers now use open banking for repeat top-ups, significantly increasing customer retention and saving on card fees.

Finally, Yapily is leading the next wave of A2A payments with Commercial Variable Recurring Payments (cVRP). This allows you to dynamically adjust recurring payment amounts based on customer usage without needing additional authorisation for each adjustment. It’s the perfect solution for subscription services or businesses with variable billing needs, giving you more control and a smoother experience for your customers.

Read more about commercial VRP: What you need to know about variable recurring payments

Manage large transaction volumes with our enterprise-ready secure API

You can tap into Yapily’s robust payment infrastructure through our RESTful API, which is powerful but lightweight and easy to integrate with your existing systems.

Our API can handle large transaction volumes, ideal for PSPs that need to guarantee greater reliability to their end-customers. We operate on a cloud-based platform and Spring framework to ensure high uptime, large transaction volume capability, and strong security for sensitive data.

We also carry out continuous performance and penetration testing to ensure our infrastructure remains reliable.

Because we’re authorised as both an AISP and PISP in the UK and Europe, you don’t have to go through the hassle of getting your own licence. This gives you time and energy to focus on growing your business.

If you already have your own licence, you can fully white-label your payment journey without mentioning Yapily, so you can fully control the user experience.

If you don’t have a licence, you can still personalise the process (although there will be a small Yapily logo for compliance).

Want to know more about our infrastructure? Check out our reference docs and try our demo.

Get wide payment coverage for compliant domestic and international payments

You won’t need to work with multiple providers to cover the countries where you want to offer end-customers A2A payments. With Yapily, you’ll have extensive payment coverage through a single payment provider.

Yapily can connect you to nearly 2,000 banks and other financial institutions across 19 regions, helping you achieve both domestic and cross-border payments.

You’ll have access to open banking in the UK via Faster Payments, and SEPA and SEPA instant in the European Economic Area (EEA). With Yapily, you’ll also have the flexibility to choose the payment methods and banks you’re most comfortable with while having a connection to all available accounts (such as business, corporate, and wealth),

Yapily’s broad coverage makes it easy to scale while providing greater payment flexibility. You can even request to use specialised providers in certain areas, if you prefer.

For instance, Pleo, a leading business spend management platform operating across Europe, turned to Yapily to improve their account top-up process.

By leveraging Yapily’s extensive coverage across regions such as the UK, Netherlands, and France, Pleo enabled their European finance teams to top up accounts in real-time, offering a clearer view of cash flow and removing the delays caused by manual processing.

This has led to an 80% return rate of customers using open banking for repeat top-ups, and significant growth in the number of customers opting for open banking A2A as their preferred payment method.

The smoother, faster experience not only increases customer retention but also reduces payment drop-offs, helping businesses maintain a steady cash flow.

Read more about our work with Pleo: How Pleo & Yapily are changing businesses spend management

How a lender leveraged Yapily’s A2A payment capabilities to enhance their customer experience

juni and yapily

The e-commerce working capital provider, Juni, reached out to Yapily to help them improve client assessment. Since e-commerce is often misunderstood by traditional banks, these firms have difficulty in accessing capital.

Not only did Juni need greater access to data to improve their decision making, they also required better coverage and quality integrations to enhance payment delivery to their e-commerce customers.

With Yapily’s account information service, Juni could access financial data from multiple accounts in the UK and across the EEA instantly and securely with their customers’ consent. This enabled Juni to personalise their credit offers while mitigating the risk of creating excessive debt for customers who wouldn’t be able to pay back their instalments.

Yapily’s A2A payments via open banking made repayments easy. Juni accessed Yapily’s PIS so their customers could initiate open banking to pay their loan instalments securely and instantly.

Since collaborating with Yapily, Juni has:

Processed £2+ million through open banking payments.
Observed a significant rise in their reporting feature with a 500% increase in open banking usage since March 2022.
Increased their high-value transactions, indicating enhanced trust in open banking.
Expanded account visibility from three months to 18 months, offering customers a clearer financial snapshot and strengthening Juni’s credit decision process.

Choose Yapily for your A2A payments

Payments don’t have to be expensive, risky or limited to one region.

With Yapily’s A2A payments via open banking, you can offer a more cost-efficient, secure and smooth payment method to increase margins and reduce fraud and chargeback risk.

You can even help your firm and your end-customers enter new markets thanks to our extensive coverage across the UK and the EEA. And, for industries that need to evaluate a client’s financial health, you can leverage our AIS to access greater financial data for better decision-making.

With our robust infrastructure, you can offer not only more efficient account to account payments but high transaction volume capabilities, making it easier to scale.

Offer account-to-account payment services to your end-customers with Yapily’s open banking solution. Speak with one of our open banking experts today.

Sources:

¹https://www.experlu.co.uk/blog/uk-credit-card-processing-fees-rates

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