Real-time Account-to-Account (A2A) payments, commonly presented to consumers as “Pay by Bank”, represent a structural evolution in how money moves through the UK economy. While a modest share of total payment value, growth dynamics, regulatory momentum, and institutional backing suggest this is not a marginal development.
What Real-Time A2A Payments Change
At its core, real-time A2A enables funds to move directly between bank accounts via open banking APIs and instant settlement rails.
This alters several structural characteristics of payments. For merchants, real-time A2A payments offer lower acceptance costs, immediate access to funds, reduced chargeback exposure and improved working capital efficiency, while for consumers they provide instant confirmation, transparent authentication, no need to enter card details, and bank-level security protections.
Open banking payments already account for approximately 8% of Faster Payments volume. While this does not yet translate into dominant share of total UK payment value, the trajectory is material, particularly given the relatively recent introduction of consumer-facing A2A options.
Pay by Bank: Commercial Adoption at Scale
“Pay by Bank” has moved beyond early-stage pilots and into scaled deployment.
The HM Revenue & Customs has processed over £2.3 billion in Pay by Bank tax payments, representing a 64% year-on-year increase EY. Government adoption at this scale materially accelerates public familiarity and behavioural normalisation.
In the private sector, eBay UK introduced Pay by Bank at checkout in partnership with TrueLayer in 2026 Finextra, exposing millions of consumers to real-time A2A at point of sale.
Regulatory reporting reinforces this trend. FCA data indicates that open banking payments are up 53% year-on-year. Consumer research shows 90% awareness of Pay by Bank in the UK.
Adoption is particularly compelling in high-value contexts, such as electronics and technology retail, automotive deposits, furniture and homeware purchases above £1,000, professional services invoice settlement, and QR-enabled payments for SMEs and hospitality.
In these categories, avoiding 1–2% card processing costs meaningfully impacts margins. Instant settlement further strengthens merchant liquidity.
Variable Recurring Payments (VRPs): The Unlocking Mechanism
If real-time A2A establishes the foundation, Variable Recurring Payments (VRPs) may represent the inflection point.
VRPs enable flexible, consumer-authorised recurring payments via open banking infrastructure. They allow variable amounts within agreed parameters, positioning them as a potential successor to card-based subscription models and other recurring arrangements.
The FCA has moved forward with establishing a commercial VRP scheme. Importantly, VRPs now account for approximately 16% of open banking transactions.
The structural advantages are clear:
• Consumer-controlled permissions
• Adjustable payment values
• Reduced fraud vectors
• Immediate settlement
• Improved liquidity for merchants compared with card cycles
Variable Recurring Payments (VRPs) suit models where amounts vary within agreed limits. Use cases include utilities (e.g. Visa’s UK energy bill pilot), telecoms, streaming services like Netflix or Spotify, mobility, EV charging, investment platforms, BNPL, savings apps, and usage-based insurance; combining flexibility, lower fees and real-time settlement.
Remaining barriers include the need for a common rulebook, consistent incentive structures across banks, and consumer protection parity with cards. However, institutional engagement suggests these frictions are being actively addressed.
Convergence: Card Networks Enter A2A
Perhaps the strongest signal of A2A maturity is participation by established card schemes.
Visa has launched a commercial A2A platform operating over UK Faster Payments, aiming to deliver card-like consumer protections within bank-to-bank transfers.
In November 2025, Visa completed its first commercial VRP transaction in the UK, settling a real-time energy bill payment from Kroo Bank to Utilita via its A2A platform.
This development reframes the narrative. The evolution is not disruption versus incumbency, but convergence.
Card networks are adapting to real-time A2A infrastructure rather than resisting it. This may remove one of the final psychological barriers to consumer adoption: perceived protection asymmetry.
A Structural, Not Cyclical, Shift
Taken together, the evidence supports a clear thesis:
Pay by Bank and broader real-time A2A payments represent a structural reconfiguration of UK payments infrastructure. They reduce systemic costs, improve liquidity velocity, and create programmable payment capabilities aligned with API-native digital commerce.
While cards remain dominant by value, growth acceleration, driven by open banking expansion, VRPs, major merchant adoption, and scheme-level convergence, suggests continued share expansion.
The UK’s National Payments Vision makes clear that seamless account-to-account payments are central to building a secure, competitive and innovation-driven payments ecosystem.
As former Federal Reserve Chair Jerome Powell has described, “Mobile devices, high-speed data communication, and online commerce are creating expectations that convenient, secure, real-time payment and banking capabilities should be available whenever and wherever they are needed” Banks for International Settlements.
The infrastructure is no longer theoretical. It is operational, scaling, and institutionally endorsed.
The Next Phase: Agentic AI and Programmable Payments
Looking forward, the intersection of agentic AI and A2A infrastructure may prove particularly consequential.
As autonomous software agents increasingly manage subscriptions, procurement, treasury optimisation, and consumer financial decisions, they will require programmable, API-native, real-time payment rails capable of machine-to-machine execution.
Open banking and real-time A2A rails are built on API-driven, tokenised authorisation models rather than static card credentials, aligning more naturally with programmable, machine-initiated payment flows. At the same time, A2A payments today typically lack the mature consumer protection frameworks that card networks provide, and when transactions are executed autonomously by AI agents, this raises legitimate questions about risk, liability and the need for scoped guardrails.
What appears today as incremental checkout optionality may ultimately underpin a broader transformation in how economic actors, human and machine, transact.
With Naomi Waheed