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An account-to-account (A2A) funds transfer is a direct transfer of money between two bank accounts that bypasses middlemen such as credit card networks or payment service providers

Account-to-account (A2A) payments refer to a variety of ways for transferring money directly between two bank accounts without the need of agents. Here are the major categories:

1. Bank transfer (SEPA, SWIFT)

Bank transfers are direct transfers between accounts via national or international banking networks.  

SEPA: Used in Europe, it allows for rapid and economical transactions in euros.

SWIFT: For international payments in different currencies, often slower and more expensive.  

2. Direct debit

This method authorises a company or supplier to withdraw funds directly from the customer’s bank account, typically for recurring payments such as invoices or subscriptions.  

3. Instant payment

These payments are made in real time, typically using systems like SEPA Instant Transfer in Europe or Faster Payments in the United Kingdom. They are available 24/7.

4. Mobile payment linked to the bank account

Mobile services, for example, allow payments between bank accounts using a mobile application, which is frequently used with a phone number or an e-mail address.  

5. P2P payment (peer-to-peer)

These payments allow money to be transferred between individuals via banking applications or financial services, directly linked to users’ bank accounts.  

6. Payments based on banking APIs (Open Banking)

Third-party systems using Open Banking can start A2A payments after receiving consumer authorization, providing an alternative to credit card payments. This is a secure and cost-effective way.

These A2A payment methods are popular because they are faster, more secure, and less expensive than traditional payments using intermediaries.

A traditional bank transfer requires you to connect to an online banking service and manually enter the beneficiary information. Also, at the time of payment, it often requires additional verification (via a card reader or other authentication method, for example). In contrast, an Open Banking transfer obtains this information automatically, making the procedure speedier and less prone to errors. Open Banking can also produce a payment link or QR code, prompting the user to pay fast and conveniently.

An Open Banking payment is based on a direct transfer of funds between the customer’s bank account to that of the merchant or beneficiary, bypassing credit card networks. This method employs secure banking APIs and complies to data security and strong authentication requirements.  

Here are the 4 main stages of an Open Banking payment:

1. Payment initiation

The client chooses Open Banking as a payment option on a merchant’s website or application.  

They choose a bank from the list.  

2. Customer authentication

Customers are redirected to their bank’s secure interface. 

They use their bank login to identify themselves and go through a rigorous authentication procedure (SMS code, fingerprint, face recognition, etc.).  

3. Confirmation and authorisation

The customer reviews the payment details (amount, recipient) and gives their explicit consent to the transaction.  

Once verified, the payment is made immediately from the customer’s bank. 

4. Payment execution

The funds are transferred immediately or within a short timeframe, depending on the type of payment (instant or standard) and the bank’s ability to support instant or non-instant payments.

The merchant or beneficiary receives instant confirmation of the transaction.

If Open Banking is used in the same way as a standard transfer, it can take 24 to 48 hours to complete a payment. Instant payments allow you to receive funds in as little as 10 seconds.  

Open Banking provides significant benefits for a wide range of use cases (e-commerce sites, marketplaces, electronic invoicing, digital subscriptions, loyalty systems, kitty and wallet services, accounting, ERP or HR software, debt collection, and so on). 

→ Confidentiality:

The client does not need to disclose the details of their bank account. The transaction is authenticated via rigorous authentication with their bank, ensuring a safe payment.  

→ Security:

The party who initiated the transfer is not required to manually input the beneficiary’s IBAN. All required information is pre-filled, eliminating the possibility of error and fraud.  

→ Simplicity:

The payment process is quick and simple, taking only a few clicks without leaving the original platform.  

→ Productivity:

Transactional data (amount, order number, etc.) is automatically captured and supplemented, making accounting management and administrative activities more efficient. 

→ Cost reduction:

Open Banking payments involve less intermediaries, lowering transaction costs and saving firms and merchants money on their financial operations.

Once received by the payer’s bank, the transfer order cannot be canceled. Unlike conventional payment methods (such as card payments), which might take several working days to complete, an Open Banking payment is completed immediately in the case of an instant payment or within 48 hours at most in the case of a standard payment.