Cards and Pay by Bank reshape multi-rail payments

Global card transactions reached 776 billion in 2024 and are forecast to grow to 1.1 trillion by 2029. Account-to-account (A2A) volumes are expected to increase from 60 billion in 2024 to more than 185 billion by 2029.

Card payments and Pay by Bank are expanding at the same time, with cards increasingly used as tokenised credentials inside digital wallets and embedded checkout flows. Pay by Bank refers to direct transfers initiated at checkout from a consumer’s bank account and is gaining traction in several European markets.

New models of agent-initiated commerce, including examples such as Visa TAP, Mastercard Agent Pay and Google AP2, allow third parties to start payments on behalf of customers. Industry participants say these flows change where fraud can occur and affect how consumer dispute rights and liability are handled.

Banks, card issuers, acquirers and payment processors are adjusting technology and operations to support multiple rails. Firms are integrating tokenisation services, wallet orchestration, real-time bank connectivity and fraud analytics so transactions can be routed across card networks and account transfers while keeping systems available and compliant.

Regulatory rules and commercial arrangements affect how revenue and costs are shared. Differences in interchange, reimbursement procedures and dispute handling can reduce issuer revenue on some rails and raise costs for acquirers and merchants. Pay by Bank can lower acceptance fees for merchants in some markets but requires different settlement and reconciliation compared with card networks.

Industry participants at a webinar hosted with a payments technology company discussed these trends. Dean Wallace, director of Consumer Payments Modernization at ACI Worldwide, argued, “Cards are being redefined as programmable, tokenised credentials at the centre of digital wallets and embedded checkout.” Jane Cooper moderated the session.

Data from the market shows growth in both rails rather than one replacing the other. Tokenisation and digital wallets allow tokenised cards to be reused across devices and services, while open-banking frameworks and account-based integrations support increased A2A usage. The payments ecosystem is adapting operational, technical and commercial arrangements to handle both types of transactions.