Cards and Pay by Bank: Rise of multi-rail payments

Card payments and Pay by Bank are operating side-by-side as part of a growing multi-rail payments landscape. Global card transaction volumes reached 776 billion in 2024 and are projected to reach 1.1 trillion by 2029. Account-to-account (A2A) transaction volumes are forecast to increase from about 60 billion in 2024 to more than 185 billion by 2029.

Card credentials are increasingly issued as tokenised identifiers inside digital wallets and embedded checkout experiences. Tokenisation replaces static card numbers with programmable tokens that can be managed by issuers, wallets and authorised third parties. New agent-initiated payment approaches, including initiatives labelled Visa TAP, Mastercard Agent Pay and Google AP2, enable a trusted third party to start a payment on behalf of a consumer, changing how authorization, authentication and consent are handled.

Pay by Bank is expanding beyond limited use cases and gaining acceptance across several European markets. Merchants and banks are adding A2A options at checkout, and the growth forecasts point to A2A becoming a more common acceptance rail alongside cards.

The technical and operational effects are wide-ranging. Banks, issuers, acquirers and processors must support multiple rails and credential formats. That requires systems for real-time routing, token lifecycle management, settlement reconciliation and consolidated fraud intelligence. The increase in checkout options adds integration and reconciliation work for acquirers and processors.

Economics of acceptance are also shifting. Token routing and wallet choice can alter interchange flows and the relative competitiveness of card schemes versus bank-initiated transfers. Reimbursement rules, merchant pricing and regulatory requirements affect how costs and liabilities are allocated between issuers and acquirers. Fraud patterns and dispute handling change when payments originate from agents or non-card rails, prompting updates to fraud controls and consumer protection practices.

Dean Wallace, director of consumer payments modernization at ACI Worldwide, described cards as “not disappearing but getting smarter.” Industry discussion has moved from a binary cards-versus-Pay-by-Bank debate to questions about payment architecture, routing and risk management across multiple rails.

Market participants face choices about platform investment, orchestration and compliance. Decisions include whether to adopt unified operating platforms that manage routing across cards and A2A, how to handle token management, and how to align acceptance economics and consumer protections with new payment methods.