Despite card networks charging $3 per $100 transaction, A2A rails like FedNow charge just $0.04, a 98.7% reduction that threatens the core economics of payment platforms.

The Cost of Card Payments

Merchants accepting card payments face a persistent structural cost burden. Card transaction fees range from 1.5% to 3.5% per purchase, according to Airwallex (2025), meaning a $100 credit-card purchase costs a merchant approximately $3. By contrast, an ACH transfer for the same amount costs roughly $0.50, as documented by Plaid (2025). On an annual basis, a business processing $1 million in card transactions loses between $15,000 and $35,000 to interchange fees alone—funds that could otherwise support margin expansion or pricing flexibility.

Beyond the fee drag, settlement timelines add another layer of friction. Card payments typically settle in two to three days (Airwallex, 2025), delaying merchants' access to working capital. For small and mid-sized businesses operating on thin margins, that lag compounds cash-flow pressure. The economics of card acceptance, long tolerated as a cost of doing business, are increasingly difficult to justify as alternative rails emerge with dramatically lower cost structures.

How A2A Payments Eliminate Interchange Fees

Account-to-account (A2A) payments transfer funds directly between bank accounts, bypassing card networks entirely. Without payment gateways or interchange fee schedules, transaction costs collapse. FedNow, the U.S. Federal Reserve's real-time payment rail, charges approximately $0.04 per transfer. A credit card, by contrast, charges roughly 3%—$3 on a $100 transaction (Swipesum, 2025). That represents a 98.7% reduction in fee per transaction.

The cost advantage extends across other A2A rails. Real-time payment (RTP) transactions carry a small per-transaction fee, often a few cents or a fraction of a percent for the sender's bank, but remain far cheaper than card interchange (Swipesum, 2025). A2A payments to merchants typically incur fixed fees in the range of £0.20 to £5, or a low percentage, versus the 1.5%–3.5% that cards command (Airwallex, 2025). For high-value B2B invoices, the savings are transformative. Open Banking APIs further amplify the benefit by enabling direct bank-to-bank payments without intermediaries, cutting out payment gateways and card networks (Praxent, 2024). Settlement is near-instant, eliminating the multi-day lag that characterises card rails.

Fee (USD) ($)Source: Orionmano Industries

Industry Adoption Accelerates Margin Pressure

High-volume payers operating on thin margins are driving the shift to A2A. The manufacturing sector provides a clear leading indicator: nearly 96% of manufacturers expect to replace checks with faster electronic payments, including direct account transfers, to reduce costs and accelerate receivable cycles (Praxent, 2024). Manufacturers and wholesalers, which process large invoices where percentage-based card fees become prohibitive, have outsized interest in adopting A2A payments to avoid those costs (Praxent, 2024).

B2B sectors such as manufacturing and wholesale are now rapidly shifting away from both paper checks and card rails toward A2A transfers (Praxent, 2024). Open Banking APIs enable this transition by allowing businesses to initiate payments directly from customer bank accounts with improved speed, transparency, and reduced processing costs. In regions like Europe and the UK, Open Banking has already unlocked cheap, instant bank transfers for B2B commerce. In the U.S., next-generation ACH and bank connectivity tools are beginning to offer similar capabilities, while FedNow's ongoing rollout expands real-time settlement options nationwide.

The Consequences for Payment Platforms

The migration of transaction volume to A2A rails directly compresses revenue for card networks and their intermediaries. A2A payments bypass card networks entirely, reducing revenue from interchange fees for both networks and acquirers (RedCompass Labs, 2024). Merchant savings on high-value transactions can reach 1–2% or more per transaction—savings that are simultaneously revenue losses for payment platforms reliant on percentage-based fees (Swipesum, 2025).

The global payments ecosystem is becoming a multi-rail model where A2A challenges card dominance, as Plaid (2025) describes. Payment platforms must recognise that interchange-based revenue models face structural erosion. The strategic imperative is to develop value-added services—such as fraud prevention overlay, reconciliation tools, cash-flow forecasting, and working capital products—that can generate revenue independent of transaction fees (RedCompass Labs, 2024). Platforms that fail to diversify risk obsolescence as merchants, particularly in high-volume B2B sectors, increasingly route payments through the lowest-cost rail available. The margin compression is not a cyclical event; it is a structural shift in payment economics driven by open banking, real-time rails, and the simple arithmetic of cost per transaction.