European Central Bank backs A2A payments in new strategy

By Vriti Gothi

The European Central Bank (ECB) has set out a comprehensive roadmap for the future of retail payments, placing renewed emphasis on pan-European integration, resilience, and reduced reliance on non-European payment systems. Its newly released “Eurosystem’s comprehensive payment strategy” highlights the growing importance of account-to-account (A2A) payments as a potential cornerstone of the region’s evolving payments infrastructure.

The strategy reflects a broader policy shift across Europe towards strengthening financial sovereignty and fostering competition in a market long dominated by global card networks. By prioritising instant payments and interoperable solutions, the ECB is seeking to address fragmentation across member states while supporting a more unified and efficient payments landscape.

A2A payments commonly referred to as Pay by Bank are increasingly seen as aligned with these objectives. Enabled by open banking frameworks, A2A transactions allow funds to be transferred directly between bank accounts, bypassing intermediaries and potentially lowering transaction costs. This model also supports real-time settlement capabilities, which are central to the ECB’s vision of a pan-European instant payments ecosystem.

The regulatory backdrop is expected to play a critical role in accelerating this transition. Upcoming frameworks such as the Payment Services Directive 3 (PSD3) and the Payment Services Regulation (PSR) aim to enhance standardisation, improve security, and create a more consistent user experience across the region. These measures are likely to address existing barriers to adoption, including uneven implementation of open banking standards and varying levels of consumer trust.

Industry stakeholders have interpreted the ECB’s strategy as a clear endorsement of A2A payments’ long-term role within the ecosystem.

Todd Clyde, CEO at Token.io, “The European Central Bank’s retail payments strategy sends a clear signal: account-to-account (A2A) payments (known as Pay by Bank) can play a central, defining role in Europe’s payments future. Pay by Bank doesn’t just align with the ECB’s vision; it’s ready to deliver it, now. It embodies the strategy’s core objective of enabling pan-European instant retail payments and fully meets the ECB’s criteria for market-led innovation: convenience, low cost, safety, efficiency, European governance, and long-term global acceptance. By calling for greater resilience in Europe’s retail payments, the ECB highlights a critical systemic shift. Europe already has the proven solution to achieve it: Pay by Bank. It drives competition, expands choice, and reduces dependency on any single payment method. With the ECB expecting PSD3 and PSR to further accelerate Pay by Bank uptake, this strategy not only underscores Pay by Bank’s strategic value, it reinforces how strongly Pay by Bank aligns as a backbone of a resilient, and future-ready European payments ecosystem.”

The ECB’s focus on resilience also signals a response to concentration risks within the payments ecosystem. Heavy reliance on a limited number of payment methods has raised concerns about systemic vulnerabilities and reduced competitive dynamics. In this context, A2A payments are viewed as a means to diversify payment options, increase consumer choice, and foster a more balanced market structure.

As Europe continues to advance its payments agenda, the ECB’s strategy indicates a more prominent role for account-based, instant payment solutions. With regulatory support and industry alignment, A2A payments are likely to play a significant role in shaping a more integrated, competitive, and future-ready European payments ecosystem.