Redefining global transaction banking with A2A and cross-border payments

 

• As A2A transfers gain traction, what does the future hold for correspondent banks in cross border transactions, and which models will take their place?
• What can stablecoin adoption in emerging markets teach us about accelerating A2A and cross-border payment innovation in developed economies?
• How can financial institutions deliver instant payments while ensuring fraud protection and transaction reversibility in A2A and cross-border contexts?

As digital payment technology evolves, demand for instant account-to-account (A2A) transfers is accelerating, projected to grow from $18.29 billion in 2023 to $284.49 billion by 2032. Unlike traditional payment methods such as credit cards or bank cheques, A2A transfers move funds directly between accounts, whether person-to-person, business-to-business, or consumer-to-merchant. The appeal lies in speed and cost-efficiency: A2A payments are typically instant and bypass legacy systems like BACS and SWIFT, which still rely on batch settlement.

Beyond speed, A2A transfers offer tangible cost savings by eliminating intermediaries, enabling businesses to pass those savings on to customers. The user experience is also enhanced: mobile access, real-time account visibility, and guaranteed payment delivery contribute to greater convenience and trust. Security is another key advantage, with encrypted channels and reduced risk of fraud or error compared to traditional payment rails.

Meanwhile, the global appetite for fast, secure, and low-cost international transactions is surging, with cross-border payments expected to rise from $190 trillion in 2023 to $290 trillion by 2030. These transactions span personal remittances, international e-commerce, and global supply chain settlements, often requiring currency conversion and compliance with diverse regulatory frameworks. The complexity of cross-border payments is being reshaped by open banking and fintech innovation, which aim to streamline processes and reduce costs.

Unfortunately, fraud for cross-border payments is still quite prevalent, with losses expected to rise above $175 billion over the next decade. Key fraud trends include synthetic identity fraud and card-not-present (CNP) fraud.

• Migration from card-based payments to A2A systems removes familiar card security layers (e.g., 3-D Secure),
• Emerging open banking ecosystems expand attack surfaces (API misuse, identity theft).
• More cross-border instant payment rails equals higher complexity and jurisdictional gaps for fraudsters to exploit.
  
   

A2A and cross-border payments are converging to redefine the future of money movement, but not without increased risk of fraud. By examining the regulatory, technological, and economic forces driving adoption, financial institutions, payment providers, and policymakers can collaborate to safely unlock the full potential of instant, borderless payments.

Register for this Finextra webinar, hosted in association with GridGain, to join our panel of industry experts who will discuss how the rise of A2A transfers reshape the role of correspondent banks in cross-border transactions.