In recent years, account-to-account (A2A) payments have risen to become a major force on the global payments landscape – and with transaction volumes projected to surge from 60 billion in 2024 to 186 billion by 2029, there is no end in sight. This explosive growth is driven by advantages such as lower fees, fraud prevention measures and rapid settlements. But a critical gap remains – the lack of standardized dispute resolution mechanisms frequently results in bank vs bank standoffs, frustrating attempts at resolution and raising urgent questions about consumer protection and merchant liability.
A2A payments utilize Open Banking technologies to enable direct transfers between bank accounts without using card schemes as intermediaries. This results in lower costs due to the absence of card scheme interchange fees. Further draws include bank-grade security measures and SCA, reducing the risk of true fraud, and the availability of rapid payment rails which allow for time-sensitive settlements to occur quickly.
A2A uptake varies by region, but is accelerating across the globe. Europe has seen the largest increase: transaction volumes are projected to reach £346 billion in the UK alone by 2029, continuing an annual growth rate of 25%, while solutions like Poland's BLIK (140 million monthly transactions) and The Netherlands' IDEAL (111 million) represent the strongest instances of regional adoption.
In the Americas, Brazil's PIX has grown even more dramatically, processing 64 billion payments in 2023 and exceeding combined credit and debit card market share by 80%. Even traditionally card-dominated markets like the US are embracing A2A through initiatives like FedNow, with McKinsey projecting $200 billion in consumer-to-business transactions by 2026.
While A2A payments offer robust true fraud prevention features like encryption and real-time authentication, they are highly vulnerable to instances of friendly fraud, such as illegitimate claims of faulty goods, account takeover (ATO), or non-delivery. For instance, while ATO claims represent a huge portion of A2A disputes, the evidence increasingly suggests many of these may actually be friendly fraud attempts, especially in markets where disputing charges has become increasingly normalized.
There are several reasons for the prevalence of friendly fraud in A2A payments, with most of them relating to lack of standardized oversight which is guaranteed in card payments. For instance, the absence of standardized fraud monitoring programs means serial friendly fraudsters can operate across different payment rails without the systematic detection common in card networks. This is particularly concerning given current friendly fraud trends – for instance, 40% of European cardholders admit to filing illegitimate disputes.
The limited options for merchant recourse are another factor behind A2A’s friendly fraud problem. Many payment rails are currently set up in ways that permit consumers to initiate disputes, but don’t allow merchants to respond with evidence of their own. This often leaves merchants with little choice but to quickly resolve in favour of the consumer, or face a confusing, costly, and time-intensive administrative ordeal.
Expect A2A’s friendly fraud crisis to worsen before it gets better. Rates are climbing year on year and now make up 70% of all fraud, according to Mastercard. The loopholes in A2A dispute processes will attract growing rates of friendly fraud until they are comprehensively addressed. Merchants should mitigate the impacts by spreading their risk across multiple payment types, and collecting robust evidence to prove the legitimacy of A2A transactions.
Unlike other online payment methods, A2A systems typically lack formal chargeback mechanisms. This means that when disputes arise, they're usually handled directly between banks, without card scheme oversight and with each institution following different procedures. Understandably, this creates abundant challenges, including:
The complexity of this system becomes particularly apparent in cross-border transactions, where different regulatory frameworks, language barriers, and banking practices collide. In these situations, dispute resolution can be delayed by months as issuers and acquirers struggle to come to an agreement.
Our prediction: as A2A payments continue to grow in popularity, the arrival of a standardized chargeback-type dispute resolution system is inevitable. Regulators will work hard to institute a solution in order to promote trade and protect both merchants and consumers. Until this happens, merchants should be careful about which A2A rails they accept, and avoid those that make dispute processes particularly difficult.
Until now A2A has existed as something of a payment landscape Wild West, but order is coming in the form of regulatory overhaul. This began with the January arrival of EU’s Instant Payment Regulation, which aims to standardize A2A payments across Europe by mandating that all banks can provide transfers within less than 10 seconds, and that all A2A payments are subject to transaction fees equal to standard interchange rates. As with chargebacks, it’s likely that some part of this fee will contribute to making dispute processes more efficient.
Perhaps even more significantly, in early 2025, Visa will launch its A2A solution (Visa A2A) in the UK, introducing formal dispute resolution processes, fraud monitoring, and enhanced consumer protections for enrolled merchants. The scheme will initially allow banks to offer increased protection on bill payments, such as utilities, childcare fees, and rent, but plans are in place to expand this coverage to a broader range of subscription services in the near future.
Though little is yet known about Visa A2A’s details, the program’s arrival signals a broader industry recognition that standardized dispute mechanisms are essential for A2A's continued growth. Expect to see similar offerings from Mastercard and American Express before long. These developments suggest that as A2A payments mature, they will adopt more robust consumer protection measures – likely resembling current card scheme chargeback processes.
The current bank-versus-bank model faces increasing strain as A2A payments continue to surge. A comprehensive overhaul of dispute handling is needed, moving beyond bilateral bank negotiations to establish industry-wide standards. Key improvements must include reliable third-party adjudication, standardized processes across payment rails, and robust fraud monitoring systems that can identify serial friendly fraudsters. These changes will become crucial as consumer protections expand and more merchants adopt A2A payments. In short, the industry needs:
As A2A volumes continue to accelerate, merchants must prepare for increased consumer protections and the introduction of comprehensive dispute resolution systems – along with rising instances of friendly fraud. Forward-thinking merchants should choose their A2A rails carefully, weighing their immediate financial benefits against their dispute handling capabilities. Meanwhile, prepare for the advent of chargeback-type A2A dispute resolution systems by implementing robust evidence collection practices, and protecting your non-A2A payments with a smart chargeback solution like Justt.
