As the account-to-account payments market accelerates, we look at how adoption is spreading and what comes next.
Shopify, an e-commerce infrastructure leader, has long used business partnerships to help merchants with handling payments. The company is continuing this strategy with its new partnership with invoice payments platform Melio to offer a direct bill payments service — which includes an option to pay directly through a bank account.
This reflects a broader trend: Account-to-account (A2A) payments, where funds are transferred between two bank accounts without intermediaries such as card networks, are gaining popularity. Since A2A cuts out some steps compared to traditional payments approaches, it can be speedier, more secure, and — crucially — can reduce transaction costs.
Using CB Insights data, we dug into the A2A market to identify what will happen next.
Key takeaways
- The market is gaining attention, with high levels of funding and several unicorns in the space.
- A2A payments adoption is spreading — Shopify’s announcement is just the latest example of how the infrastructure is expanding.
- Payment processing incumbents will become more active in the space, while open banking and payment fintechs are also likely to launch beefed-up A2A services. American Express’ investment in Melio is an example of this growing incumbent interest.
A2A is gaining attention and sprouting unicorns
While A2A transactions aren’t new, attention is growing as more payments are handled digitally — particularly in the wake of the pandemic. Already, nearly 1 in 10 dollars spent within the global e-commerce space is an A2A transaction, according to FIS’ 2023 Global Payments Report.
Investors are also paying attention to this market opportunity.
Melio and its direct competitor GoCardless have collectively raised more than $1B in equity funding — and have gained backing from prominent VCs like Accel and Bessemer Venture Partners. Melio, GoCardless, and Trustly are all A2A startups that became unicorns within the last few years.
To see more players in this space and their funding activity, check out the A2A payments Market Profile on the CB Insights platform.
