Account-to-account [A2A] payments enable the real-time flow of funds between bank accounts and digital wallets. On our mission to power the movement of value through the digital economy, they are core to what we do and fundamental to our vision of enabling better ways to pay.
In a modern digital economy, payments shouldn’t take days, hours, minutes or even seconds to settle.
Imagine a world where the bank accounts of customers are directly connected to the bank accounts of their favourite merchants. Then imagine how smoothly and quickly — with verified identities, trust, and consent — data-rich payments could flow and settle between those bank accounts.
In an account-to-account payments [A2A] enabled world, bank accounts cease being passive spaces where money is simply stored. They are brought to life as dynamic places from which to seamlessly make and take data-rich payments in real time.
Speed & Simplicity
I like the simplicity of account-to-account. Simply moving money from Account A to Account B with no intermediaries, without multiple parties taking cuts, without a payment gateway, without X-Y-or-Z getting in the way.
It makes logical sense to me to move money [or value] from one person, and deliver it to another quickly and efficiently. The simpler a transaction can be, the simpler [and better] the overall customer experience can be. That's why I like account-to-account payments.
As modern digital payment infrastructure switches on around the world, real-time A2A-enhanced economies are fast becoming a reality. Pay by bank or Pay by bankaccount will, we believe, quickly become a convenient, fast, trusted payment method globally. At Australian check-outs PayTo will be a key driver of this sitting comfortably beside the credit card logos and other legacy payment methods we’ve been tethered to for decades.
Letting go of 'legacy'
What we've been working with until relatively recently—the credit card rails and the 16-digit PAN numbers that link your money to a transaction—was built 50 years ago.
The credit card rails weren't built for the digital age. Kudos to the card companies—they've done a great job remaining relevant—but it's time to reimagine how digital payment experiences can be delivered.
Prior to the launch of Australia’s fast A2A payments system—the New Payments Platform [NPP]—in 2018, all account-to-account payments ran along legacy Direct Entry infrastructure. Think traditional direct debit which is slow and data-blind, for example. The NPP, however, enables consumers, merchants and government agencies to make real-time, data-rich payments between bank accounts 24 hours a day, every day of the year.
This is a new era of real-time, account-to-account payments. It's secure, simple and has the flexibility to power other payment experiences and value exchanges that few people have even thought of yet.
More than just speed
According to the RBA’s Payments System Board Annual Report - 2022, the NPP processed more than a billion Australian transactions worth more than $1 trillion in the 12-months covered by the report. The NPP now processes more than a quarter of all A2A payments in Australia. If you’re using PayID or PayTo as a payment method, the NPP’s payment rails are moving those funds in real time.
But it’s not just the speed of these payment methods that has the world sitting up and taking notice.
According to ACI Worldwide’s Prime Time for Real-Time report [2022], there’s a clear correlation between real-time payments and economic growth. The report states that Australia’s real-time payments delivered estimated cost savings of $205 million for businesses and consumers in 2021 – which helped to unlock $US932 million of additional economic output, representing 0.06% of the country's GDP.
Further, the report states, real-time payments helped generate an additional economic output of $78.4 billion in 2021 across 30 countries. By 2026, across the same group of countries the figure is expected to hit $173 billion.
Clearly this new era is about much more than convenience. The speed and smarts of real-time A2A payments infrastructure is unlocking real value across the global economy.
The Zepto Way
On a mission to power the movement of value through the economy, Zepto is anchored to this vision of a better way to pay. For Ian Lennie the better way is whatever each Zepto customer needs from its payment solution.
We operate on both the real-time and legacy rails of Australia's payments infrastructure, and we use them interchangeably.
We see some of our merchant customers taking a real time payment from a customer's bank account in the first instance to confirm an order in real time. Then they might use the slower, legacy rails when it's less time sensitive for, say, recurring payments going forward. We don't push either way. We just devise and realise exactly what they need to offer the seamless digital payments experience their customers expect, and deliver the efficiencies their business needs.
As one of Zepto's founders, we started our entrepreneurial journey together operating a large skydiving enterprise in Byron Bay.
Despite managing dozens of aircraft, buses, skydive drop-zones and hundreds of staff, the biggest business frustration we experienced was the tangle of legacy payments infrastructure, systems, tech and — worst of all — legacy thinking. The status quo was slow, expensive and unfit for modern businesses.
Our experience as merchants has given us a unique perspective on the daily payment challenges Australian businesses face. We have unpacked a real-life merchant experience into a payment solutions tech-infrastructure company on a mission to enable businesses like Spaceship and Fetch to freely devise their own innovative, account-to-account payment experiences.
The author
