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Can account-to-account payments take on the credit-card industry?

Payment service providers have welcomed the UK Payment Systems Regulator’s plan to promote account-to-account payments, but much needs to be done to boost take-up.


One of the key objectives of the five-year plan announced by the Payment Systems Regulator (PSR) earlier this year was to look at how account-to-account or interbank payments could provide a credible alternative to card payments.

The regulator has refined its priorities in this area to make it clear that good outcomes for all interbank payments should include those initiated through open-banking services.

James Booth, PPRO.jpg
James Booth, PPro

According to PPRO, there is huge potential for market disruption, with bank transfers accounting for only 6% of all online payments in the UK, while cards account for 52% of the market. James Booth, the firm’s head of partnerships, EMEA, says it is highly unlikely that most businesses and merchants will receive account-to-account payments directly from consumers as this would create a reconciliation nightmare.

“However, the adoption of bank-transfer payments via open-banking rails will continue to grow,” he says. “Instead of merchants offering this payment method directly, we will increasingly see interbank payments being integrated into payment service providers and gateways for merchants to link with consumers.”

In 2021, open banking payments increased by 500% but the numbers are still tiny compared with the volume and value of card transactions
Louise Shorthouse, Icon Solutions
Louise Shorthouse, Icon Solutions.jpg

Peter O’Halloran, head of enterprise and digital commerce, EMEA, at Fiserv, says: “The potential of account-to-account payments is substantial and the growth trajectory of open-banking transactions over the past two years shows clear traction and increasing consumer and business adoption.”


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