Account to Account Payment: Its Role in Crypto Settlement

The payments industry is experiencing a significant transformation as account to account payment methods reshape how money moves between financial accounts. While traditional payment methods like credit or debit card transactions have dominated for decades, these payments rely on a card network, such as Visa or MasterCard, to process transactions. A2A payments bypass the card network entirely, enabling faster and more direct transfers. A2A payments represent a payment revolution that’s fundamentally changing how we transfer funds, particularly in the emerging world of cryptocurrency settlement.

Key Point Summary

• Understanding Account-to-Account Payments
• Push Payments vs. Pull Payments
• How A2A Payments Work
• Advantages Over Traditional Payment Methods
• The Crypto Settlement Connection
• Consumer to Business and Consumer to Consumer Applications
• Collecting Payments with A2A
• Role of Financial Institution
• Bank Statement Verification
• Implementation Challenges
• The Future of Payment Operations

Understanding Account-to-Account Payments

Account to account payments, commonly referred to as A2A payments, enable the direct transfer of money directly between two bank accounts without intermediaries like card networks or third party payment providers. Unlike card payments that route through debit card networks and card processors, direct bank payments move funds directly from the payer's account to the recipient using existing payment rails established by financial institutions, highlighting the efficiency and directness of this method.

This payment process differs dramatically from traditional banks’ reliance on credit or debit card infrastructure. When shopping online or making online purchases, consumers typically reach for their debit cards. However, A2A payments allow users to initiate payments directly from their bank accounts, bypassing the card details entry process entirely and reducing fraud risks associated with sharing sensitive card information.

Push Payments vs. Pull Payments

A2A payments encompass both push payments and pull payments, each serving distinct purposes in the payment system:

Push payments occur when the payer initiates the transaction, actively authorizing the transfer of funds from their own accounts to the recipient. Push payments are an efficient way of transferring funds directly between accounts for various use cases, including fintech transactions, merchant payments, and peer-to-peer transfers. These one off payments or instant payments provide immediate control and are increasingly popular for consumer to consumer and consumer to business transactions. Payment apps and open banking payments have made push payments more accessible, allowing users to collect payments or send money with just a few taps.

Pull payments, conversely, allow recipients to withdraw funds from the payer’s account with prior authorization. Direct debit arrangements exemplify this model, where a direct debit mandate grants merchants permission to collect payments for recurring payments like subscriptions or utility bills. The automated clearing house system has long facilitated these pull payment transactions, though newer faster payments systems now offer real time payments capabilities.

How A2A Payments Work

The payment operations behind account payments have evolved considerably. Traditional bank transfers often required manual intervention and could take days to settle. Modern direct bank payments leverage open banking implementation entities and enhanced payment rails to enable instant payments. An open banking implementation entity is the authoritative body or standard-setting organization (such as OBIE in the UK) that guides and regulates open banking practices and ensures compliance.

When a customer initiates payments through an A2A system, strong customer authentication protocols verify their identity and account details. The payment services then connect to the financial institutions holding both the sender’s and recipient’s accounts owned by the parties involved. Unlike other payment methods that route through multiple intermediaries, A2A payments create a direct connection between one account and another.

Open banking has been instrumental in this transformation. By allowing third party providers secure access to bank statement data and payment initiation capabilities, open banking payments enable seamless integration between payment apps and traditional banks. This innovation has made it possible to initiate payments directly from investment accounts, savings accounts, or other financial accounts without requiring separate payment processors.

Advantages Over Traditional Payment Methods

A2A payments offer compelling benefits compared to other payment methods:

Lower costs represent perhaps the most significant advantage. Card networks and debit card networks charge merchants substantial processing fees—typically 2-3% per transaction. Direct bank payments eliminate these intermediaries, resulting in lower processing fees that can save money for both businesses and consumers. Over just a few years, these savings can become substantial for high-volume merchants.

Enhanced security comes from reduced exposure. Since users don’t need to share card details with merchants, fraud risks decrease significantly. Strong customer authentication requirements in open banking payments add additional security layers that surpass traditional card payment protections.

Faster settlement through real time payments means merchants can access funds almost immediately rather than waiting days for card payment settlement. The adoption of real time payment rails has been a key evolution, enabling immediate fund transfers and reducing settlement times for both merchants and consumers. This improved cash management helps businesses maintain better liquidity and reduces the need for working capital financing.

Better user experience emerges from simplified online transactions. Rather than manually entering payment information when shopping online, customers can authenticate once and approve payments directly from their banking apps. This streamlined approach reduces cart abandonment and improves conversion rates.

Instant refunds become possible with direct bank payments, as money movement happens in real time rather than requiring the multi-day reversal processes common with card payments.

The Crypto Settlement Connection

The intersection of A2A payments and cryptocurrency settlement represents a powerful convergence. Crypto transactions have traditionally faced a significant challenge: converting between fiat currency in bank accounts and digital assets on blockchain networks. This gap has created friction, delayed settlement times, and introduced unnecessary intermediaries.

A2A payments provide an elegant solution for crypto settlement by enabling direct transfer between financial accounts and cryptocurrency platforms. When users want to purchase cryptocurrency, real time payments allow instant funding of exchange accounts from their own bank accounts. Similarly, when converting crypto back to fiat, faster payments can deliver proceeds directly to users’ bank accounts within minutes rather than days.

Open banking integration has been particularly transformative for crypto settlement. By allowing cryptocurrency exchanges to become a third party payment provider within the open banking framework, these platforms can enable payment initiation and consent management directly from users’ accounts at traditional financial institutions. This removes the need for intermediate payment processors and their associated delays and costs.

The Federal Reserve and other central banking authorities have recognized the importance of modernizing payment rails to accommodate emerging use cases like crypto settlement. Enhanced payment systems supporting instant payments create the infrastructure necessary for seamless crypto-to-fiat conversion.

Consumer to Business and Consumer to Consumer Applications

In consumer to business scenarios, A2A payments enable merchants accepting cryptocurrency to settle transactions more efficiently. When customers pay with crypto, merchants can instantly convert proceeds to fiat currency in their business bank accounts using direct bank payments. This immediate settlement reduces the volatility risk that has historically deterred merchant crypto adoption.

For consumer to consumer payments involving cryptocurrency, A2A payment methods simplify peer-to-peer crypto transactions. Users can fund their digital wallets from one bank account, execute crypto transfers on blockchain networks, and have recipients withdraw to their financial accounts—all using direct bank payments infrastructure for the fiat components.

Collecting Payments with A2A

Collecting payments with account to account payments offers businesses a streamlined, secure, and cost-effective way to receive funds directly into their bank accounts. By bypassing traditional card networks and payment processors, A2A payments reduce transaction fees and eliminate the risk of chargebacks, making them an attractive payment method for both one off payments and recurring payments. Businesses can leverage open banking technology to initiate payments directly from their customers’ bank accounts, simplifying the payment process and improving cash flow. This direct approach not only accelerates settlement but also enables features like instant refunds, allowing businesses to return funds to customers’ bank accounts quickly and efficiently. Whether using direct debit for subscriptions or collecting payments for online transactions, A2A payments empower businesses to manage account payments with greater control and transparency, ultimately enhancing the customer experience.

Role of Financial Institution

Financial institutions are at the heart of the A2A payments ecosystem, providing the secure infrastructure necessary for direct bank transfers. They ensure that every bank account involved in an A2A payment is protected by robust security measures and that all transactions comply with regulatory standards. By supporting open banking initiatives, financial institutions enable third party providers to access account data and initiate payments, fostering innovation and competition across the payments industry. In addition to facilitating bank transfers, financial institutions offer services such as payment processing, account management, and advanced fraud protection, helping businesses and individuals benefit from lower processing fees, faster settlements, and reduced fraud risks. By partnering with financial institutions, businesses can confidently adopt A2A payments, knowing they are supported by reliable and compliant payment operations.

Bank Statement Verification

Bank statement verification is a critical component of the A2A payment process, ensuring that each transaction is both legitimate and authorized. This step involves confirming the payer’s account details—such as account number and sort code—to verify that payments are being made from valid bank accounts. Businesses can perform bank statement verification manually or utilize automated solutions powered by APIs and machine learning, which streamline the process and enhance accuracy. By verifying bank statements, organizations can safeguard their financial accounts against fraudulent activity, prevent unauthorized payments, and maintain the integrity of their payment process. Additionally, thorough bank statement verification supports compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations, helping businesses meet their legal obligations while protecting both themselves and their customers.

Implementation Challenges

Despite their advantages, A2A payments face implementation hurdles. Legacy payment systems at many financial institutions weren't designed for real-time, API-driven payment operations. Upgrading these existing payment rails requires significant investment from traditional banks.

Integration with traditional payment methods remains necessary during the transition period. While A2A payments grow, consumers still rely on card payments, digital wallets, and other payment methods. Payment services must support multiple payment rails simultaneously, adding operational complexity.

Regulatory frameworks around open banking and direct debit mandates vary across jurisdictions. What works in one market may require substantial modification for other financial institutions operating in different regions. Strong customer authentication requirements, while beneficial for security, can also create friction if poorly implemented.

For cryptocurrency settlement specifically, regulatory uncertainty around digital assets complicates A2A payment integration. Financial institutions remain cautious about facilitating crypto transactions, limiting the availability of direct bank payments for crypto purposes.

The Future of Payment Operations

Over just a few years, A2A payments have evolved from niche applications to mainstream payment methods. The payments industry increasingly recognizes that direct bank payments offer superior economics and user experience compared to card-based alternatives.

For crypto settlement, this shift is particularly significant. As instant payments infrastructure matures and more financial institutions embrace open banking, the friction between traditional finance and digital assets will continue decreasing. Account payments will likely become the primary on-ramp and off-ramp for cryptocurrency users, replacing slower and more expensive transfer funds methods.

Payment apps integrating both A2A payments and crypto functionality represent the next frontier. These platforms can leverage direct bank payments for fiat transactions while using blockchain networks for digital asset transfers, creating unified money movement experiences that transcend the traditional boundaries between banking and crypto.

Conclusion

Account-to-account (A2A) payments are reshaping how businesses and financial institutions move funds, offering faster, cheaper, and more secure settlement compared to traditional methods. For crypto transactions, A2A solutions provide seamless fiat-to-crypto on-ramps and off-ramps, enabling real-time liquidity flows.

At FinchTrade, we leverage A2A capabilities to empower PSPs, exchanges, and institutional clients with direct bank connections that streamline crypto settlements, reduce operational friction, and optimize treasury efficiency. By integrating robust A2A infrastructure with our liquidity and OTC solutions, we bridge traditional finance and digital assets.

As adoption of A2A payments grows, platforms that embrace these rails gain competitive advantages, ensuring reliable execution, minimized transaction costs, and enhanced transparency. FinchTrade positions clients to navigate the evolving digital payments landscape, supporting scalable, compliant, and future-ready crypto operations.

For requesting more information about how we can help reach out to us. We're here to help and answer any questions you may have.

Contact us!