A2A payments in the US – where are we now?

Lindsay Lehr, Managing Director of Payments and Commerce Market Intelligence (PCMI), elaborates on the evolution of A2A payments in the US.

How does the US situate itself globally in terms of A2A payment adoption, and which factors contribute to the current state of the industry?

The US is quite behind in A2A infrastructure compared to the global stage. To illustrate this, one approach would be to examine the number of real-time payment (RTP) transactions per capita in different countries. When we analysed this recently, we found that Brazil is leading by far, with 435, which is quite impressive. Brazil has one of the most scaled-up RTP systems in the world. After Brazil, India had 177 RTP transactions per capita. The global average is 59, yet the US is currently at 18. While that is still more than one per month on average, it’s far behind the global statistics.

Figure 1: RTP transactions per capita – adult population

Sources: PCMI analysis, based on data from Pix, UPI, FedNow, Zelle Investor Relations, Brazil’s Central Bank, The World Bank, and ACI Worldwide.

There are several reasons for this. First, typically, payments in the US work and are accessible. While they are a little slower than other systems, they are still efficient and address most needs. So, there hasn’t been a huge urgency to modernise, upgrade, or speed up payments.

Additionally, the US, unlike Brazil or India, does not have a federal mandate for the adoption of RTPs, nor an interoperable mandated system. It has several, both private and public, bank-owned RTPs. When you count them all together, there are five or six operating schemes, but they are not interoperable. This, of course, creates fragmentation, which slows adoption. It leaves it up to the players to tap into the competitive forces at their disposal to win or lose market share, creating the ability for these different schemes to flow to diverse use cases and to build niches for themselves.

In Brazil, banks are mandated to adopt the government-run RTP system. A very strong branding initiative from the central bank and those participating in the system, along with a consumer-facing brand, incentivised the entire country to adopt one RTP. This simply isn’t the case in the US.

Here, we have the early positioning of private peer-to-peer (P2P) apps like PayPal and Venmo, and only in 2024 did the Federal Reserve launch its own RTP system. As such, lack of mandate, marketing, and interoperability are other big factors.

Another cause is that today, especially for FedNow, there are unclear incentives for banks to adopt RTPs – they are not experiencing much demand from their customers. Necessarily, that will change as small businesses and corporate clients develop a larger appetite for real-time money movement, and banks will be under pressure to enable that. Banks are also very afraid of the risk. They are not familiar with RTPs nor know how to deal with them. They don’t know how to reconcile, liquidate, and deal with potential fraud. A lot of education and a lot of new calibration needs to take place.

Figure 2: Infrastructure gaps still hold back RTP adoption in the US

Source: US Faster Payment Council, PaymentsDive, Banking Journal, Nerdwallet, Vertifi, Federal Reserve 

How have regulations impacted A2A payment developments in the US, and how will the industry progress following the CFPB’s new Open Banking rules?

Brazil and the UK are leaders in terms of regulation on both A2A payments and Open Banking. Again, federally mandated compliance with Open Banking regulation is required, and this has helped speed up adoption. But in the US, we do not have a sweeping Open Banking regulation or mandate. However, these new rules are very interesting. What they basically do is require financial institutions and others to transfer custody of consumers’ financial data from the bank to the actual customer. This means that if I want to switch banks, I can take my entire financial history and make it accessible to another financial service provider.

Why is this important? Because that financial service provider will be able to see my history (transaction and credit), and provide me with more customised services according to my unique profile. Beforehand, if this were not possible, I would start from scratch, and they would not be able to issue me credit or give me any type of rewards or incentives, because I would have absolutely zero profile with them. That’s quite revolutionary for the US market: a paradigm change in terms of data ownership.

On the technical side, it will be a little bit tricky. The rules are compelling banks to enable APIs that can be called upon when a consumer wants to provide access to their data to a third party, which will take time to develop. For this to have legs, consumers need to understand what it means. We’ve seen in Brazil and the UK that most consumers don’t really understand Open Banking, and more importantly, they don’t care.

Currently, the user experience (UX) is a box that pops up in their online banking, asking: ‘Do you give your permission to share your data with these other financial institutions?’. Most people don’t understand what that means, and they don’t care. They probably click ‘No’ because sharing data sounds risky, and there’s no compelling value proposition offered to them for them to do such a thing. Only those who want to make multiple financial movements in a digital format will want to do this. This is not everyone in the US.

Therefore, it will take some time to educate consumers, but this will enable a faster rollout of Pay by Bank, whereby I could pay for an online purchase using my bank account. It will create more competition for banks, as consumers can easily receive offers from other financial service providers and transfer their data to new players faster and for free. For example, I’ve had my banking relationship with Bank of America for over 20 years. If I ever needed to make a change, it would now be much easier to do that under these rules.

How will the Federal Reserve’s migration to the ISO 20022 standard further impact the adoption of real-time payments? 

To clarify, ISO 20022 is currently being adopted by the Federal Reserve for the Fedwire Funds Service. That’s taking place now in 2025 and impacts wires. Wires, as we know, are typically used for high-value transactions that are B2B and are expensive, costing USD 30 or USD 50 per transaction. They’re not used for regular retail payments. Essentially, the migration to ISO 20022 will upgrade the infrastructure for wires, making them more compatible and interoperable with a global standard that tells you what information to include. It standardises and expands the level of information required when sending a wire. This allows companies to reject fewer transfers and have more successful ones, while fraud will be easier to detect. The ISO 20022 will make wires more efficient and more easily automated. This standard will also increase the likelihood of real-time, cross-border wires. Cross-border payments can often take multiple days, and this upgrade to ISO 20022 increases the probability that these transactions can be expedited. For international wires, this upgrade might make them more resilient to competition from digital real-time, cross-border transactions. However, at this stage, that’s quite speculative.

All that said, this migration to ISO 20022 will not impact RTPs like FedNow or The Clearing House. It is impacting wires. However, that is an improvement, and we can expect wires to flow more smoothly, be more cost-effective, efficient, and offer an overall better UX.

What primary challenges do ecommerce players face when implementing A2A payments, and how is consumer payment behaviour expected to evolve?

In the US, there is currently little demand for A2A payments in ecommerce, as credit and debit cards work very well; consumers are particularly attached to credit cards. It’s also because Buy Now, Pay Later (BNPL) has become the chosen alternative payment method. If I don’t want to pay with a credit or debit card, or don’t have one, I have the option to open an account with Klarna or Afterpay, and get access to a small loan to fund a purchase. This has been very popular, especially with younger consumers. As a result, the biggest challenge is a lack of demand from consumers to implement A2A payments.

Figure 3: % of US consumer expenditure, 2024

Another challenge is UX and integration. Take the case of a cash app or Venmo, which are starting to see a bit more adoption in ecommerce. They have the difficult job of going merchant by merchant or acquirer by acquirer to enable an integration so that they can appear at checkout, which is a lengthy process. Merchants now have another payment method to onboard, reconcile, manage, deal with reversals and chargebacks, and the UX and integration are difficult to justify when there isn’t a huge demand for it on the consumer side. The same complexities apply to A2A payment systems.

Take, for example, the new wave of adoption of the Pay by Bank service, offered by companies like Stripe and seen at select merchants. Again, the challenge is justifying the investment in this payment method when there’s little consumer demand. However, this could change as merchants push these solutions more. Merchants have a big incentive to offer these because, firstly, they’re irrevocable, so they are much less susceptible to reversals. Additionally, merchants receive payments in real time, which is highly favourable for them. Lastly, the cost is much lower.

So, if large merchants cooperate to really push this A2A movement, we could start to see consumers being attracted to it, especially if the merchants start surcharging them for card transactions or provide an incentive to use Pay by Bank. For example, in Brazil, if you pay with Pix (the local RTP scheme), you can receive up to a 10% discount. There is precedent for major incentives to pay for things with A2A, and that’s mostly happening in ecommerce. Although the major challenge for US merchants is a lack of consumer demand and competition from other payment methods, specifically cards, we are starting to see that change slowly.

Figure 4: Market pressure could be the tipping point for RTP at the POS 

Source: Xero, Food and Wine, JD Power, PaymentsDive

Which consumer considerations should be prioritised when developing A2A payment solutions? 

Branding is so important when developing a payment method. What is this brand? Is it trustworthy? Is it easy to use? Is it fun? Is it attractive? What kind of incentives am I getting? What does this brand stand for?

Another key aspect to consider is whether the UX is a rich, mobile-based, approachable experience. And that’s very closely tied to the question of ‘What is the incremental value I’m receiving over other payment methods?’. There are such aggressive incentives for other payment methods. Why should I adopt this new one? What’s that incremental value that I’m going to get?

Beyond that, we must ask: what use cases does this A2A payment apply to? And what does it solve? There are certain use cases, mostly in B2B and corporate payments, where there truly is a demand for more efficient payments on the consumer side. The payments space is tough, quite crowded, and most methods work quite efficiently. A company would have to consider the use cases where A2A payments are working and if the landscape is too crowded for the company to enter.

Figure 5: Speed alone doesn’t drive adoption 

Source: FICO 2024. Payments in 2025: Insights on Trends, Fraud, Flexibility, and Consumer Behavior, KUBRA.

Also, cost is always a concern. Usually, when talking about consumer considerations, the cost to them is almost always zero – it is typically paid by the payee, which needs to be taken into account. The final aspect is kind of related to everything I’ve already said: the question of incentives. Am I being rewarded for using this payment method with points, cashbacks, other rewards, or memberships? The credit card industry has really taught consumers to expect generous rewards when using a payment system, but not everyone can afford that, especially when costs are lower. As such, companies must ask themselves: what incentives are we offering consumers to buy into this new system?

This editorial piece was first published in The Paypers' Account-to-Account Payments Report 2025, which features insights into global trends, key players, partnerships, and the next phase of the A2A evolution. Access the full report to understand where the A2A payments ecosystem stands today and what’s next.

About the author 

Lindsay Lehr is the Managing Director of Payments and Commerce Market Intelligence (PCMI), a strategy consultancy specialising in the global payments industry. Since 2012, Lindsay has managed over 400 client engagements in the payments industry, growing her team of one to over 50 consultants based across the US, Latin America, Europe, Asia, and South Africa. Lindsay is a renowned thought leader in the payments space, advising the world’s most exciting companies, including card networks, global marketplaces, and payment platforms.

 

About Payments and Commerce Market Intelligence (PCMI)

PCMI is an advisory group focused on the global payments industry, with over 30 years of experience providing market intelligence to corporations, executing more than 500 client engagements in the payments industry since 1991. PCMI performs custom strategic engagements, including market sizing, opportunity benchmarking, market entry, customer insights, and more, covering over 50 global markets in the Americas, EMEA, and APAC regions. Visit www.paymentscmi.com to learn more.