- Discover and Bank of America are adopting account-to-account (A2A) payments, which allow customers to pay for purchases directly from their bank accounts.
- These new payment solutions can help reduce interchange fees for merchants.
- Insider Intelligence publishes hundreds of insights, charts and forecasts on the payments and commerce industry. Learn more about becoming a customer.
The news: two major card issuers offer account-to-account (A2A) payment solutions.
Insider information
Discover is reportedly partnering with fintech payments Buy It Mobility (BIM) so that its partner merchants can accept cardless payments, according to the Wall Street Journal. Customers can pay directly from their bank account using merchant apps, and transactions will use the Automated Clearing House (ACH) network. The companies are expected to announce their partnership later this week.
Bank of America is allowing UK e-commerce merchants to accept A2A payments with Pay by Bank, according to a press release. To use the solution, customers choose Pay by Bank at checkout and select their bank from a menu. This feature is not exclusive to Bank of America customers. Transactions are authenticated using
Discover Opportunity: Integration reduces Discover merchants’ reliance on card payments, helping them save on interchange fees (fee networks charge merchants to accept card payments) . These savings can be passed on to the customer in the form of rebates, which can help drive adoption and repeat purchases, leading to closer merchant relationships for Discover.
Discover may be using the integration to improve its positioning as a payment provider: increased use of the ACH network, which typically powers A2A transactions, for B2B payments and healthcare transactions is expected to open a lane to use it for retail payments. ACH volume grown up 8.7% year-over-year in 2021.
Bank of America Opportunity: Paying by Bank Can Make Bank of America More Attractive merchant solutions provider for retailers, as it allows them to offer more payment options. And like Discover, Bank of America’s offering also helps limit the amount of interchange fees merchants pay.
Bank of America plans to introduce Pay by Bank in other markets, and the United States may soon consider the issuer’s strong presence in the country. Expanding the solution globally can give Bank of America a stronger connection to open banking, a sector fintechs love Plaid and owned by Mastercard Fincity rapidly gaining ground. Transactions facilitated by open banking are expected to reach $116 billion globally by 2026, according to Research on juniper.
Want to read more stories like this? Here’s how you can access it:
- Join other Insider Intelligence customers who receive payments and trade forecasts, briefs, charts and research reports in their inbox every day. >> Become a customer
- Explore related topics in more depth. >> Browse our coverage
Current subscribers can access the entire Insider Intelligence content archive here.
