The Faster Payments Service has moved money between UK bank accounts in near-real-time since 2008, handling transactions up to £250,000 in seconds with no interchange fee. The economics of this infrastructure are categorically different from card payments: where a card transaction for a £200 B2B purchase might carry an interchange cost of £1.80 plus scheme and acquirer fees, a Faster Payments transaction carries a nominal per-item fee that a payment service provider typically absorbs well below the 50p mark. For B2B payments in particular — where card consumer protections are irrelevant, where the payer is sophisticated, and where both parties benefit from same-day settlement — the case for A2A over card is arithmetically obvious. The question has never been whether the economics work. The question has been whether the commercial infrastructure to make A2A a reliable payment product exists.
The missing piece until recently was not the rails but the product layer above them. Open Banking payment initiation — the mechanism by which a third-party payment service provider can instruct a bank transfer directly from a customer's account with their consented authentication — reached reliable commercial availability in the UK only in 2020 and 2021 as the OBIE mandated standards were enforced and bank API quality improved. Before that, building an A2A payment product meant accepting high failure rates, inconsistent bank UX, and a customer authentication flow that required the payer to leave the merchant's context entirely. Those friction points were enough to make A2A a secondary option despite superior economics.
The arrival of well-implemented payment initiation APIs has changed the calculus. Companies like Crezco — which we backed in 2021 — are building B2B payment products on top of Open Banking payment initiation that offer the Faster Payments settlement speed and economics with a user experience that is competitive with card checkout. For accountancy software, legal firms, and professional services businesses collecting B2B payments, the value proposition is direct: faster settlement, lower cost, and automatic reconciliation against invoice references. The adoption curve in these verticals is steeper than in consumer e-commerce precisely because the payer is a procurement function, not a consumer making a convenience decision.
We are cautious about extending this thesis too far into consumer retail payments. The card network for consumer e-commerce carries Section 75 chargeback protections that are not replicated in an A2A payment, and the consumer familiarity with card checkout — combined with the fraud liability framework that card schemes provide — means that the consumer switching cost is not just a UX preference but a genuine risk management consideration. We are not arguing that card is finished for consumer payments; we are arguing that the B2B and professional services use case is structurally different, and that A2A is already at or near tipping point for those flows.
The regulatory development that will accelerate A2A adoption in the consumer segment is Variable Recurring Payments. VRP — the Open Banking mechanism for setting up a consented, variable, recurring debit from a customer's account — is currently mandated only for sweeping use cases (moving money between accounts owned by the same person). The commercial VRP mandate, which would extend this to third-party payments like subscriptions and utility billing, has been in discussion since 2021. If the Payment Systems Regulator moves to mandate commercial VRP, the use case for direct debit replacement becomes compelling: faster settlement, real-time confirmation, and lower failure rates than traditional direct debit. The infrastructure companies building on top of VRP rails — for subscription billing, for insurance premium collection, for utility payments — are positioning for a transition that, in our view, is a matter of when rather than if.