Europe’s Pay-by-Bank Revolution — The Silent Card Killer

While Wero and the digital euro grab headlines, a quieter revolution is underway. Account-to-account payments are eating into card market share across Europe, and a wave of consolidation is building the infrastructure to accelerate the shift.

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Account-to-account (A2A) payments — where money moves directly between bank accounts without touching card networks — made up 17 per cent of European e-commerce transaction value in 2024 and are expected to exceed €850 billion in transaction value by 2026. National champions like iDEAL in the Netherlands (70 per cent of Dutch e-commerce, over 1 billion transactions in 2024), Bizum in Spain (over 30 million users, 3.4 million daily transactions), Swish in Sweden (85 per cent of adults) and BLIK in Poland (180 million monthly transactions) already dominate their home markets. A consolidation wave — TrueLayer acquiring Zimpler, Mollie acquiring GoCardless — is now stitching these national networks into pan-European pay-by-bank platforms. Combined with the EU’s mandatory instant payments regulation, A2A is emerging as the most serious structural threat to Visa and Mastercard’s European business.

What is pay-by-bank and how big is it in Europe?

Pay-by-bank is exactly what it sounds like: a payment that moves money directly from a customer’s bank account to a merchant’s, bypassing card networks entirely. No Visa. No Mastercard. No interchange fee. The transaction runs on SEPA rails, settles in seconds under the EU’s instant payments mandate, and typically costs merchants 30 to 70 per cent less than card processing.

The numbers already tell a compelling story. A2A payments accounted for 17 per cent of total domestic e-commerce transaction value in Europe in 2024. Volumes are expected to grow by 30 per cent in 2025, and the European market is forecast to exceed €850 billion in A2A transaction value by 2026. Globally, A2A transactions are projected to surge from 60 billion in 2024 to 186 billion by 2029 — a 209 per cent increase. By the end of 2025, one in four Europeans was expected to use A2A for online purchases. By 2029, that figure rises to three in four.

The growth is being driven not by a single pan-European system but by national champions that already command dominant positions in their home markets. In the Netherlands, iDEAL processed over 1 billion transactions worth €141 billion in 2024 and holds roughly 70 per cent of Dutch e-commerce. In Spain, Bizum has more than 30 million users — over half the population — processing around 3.4 million daily transactions. Sweden’s Swish is used by 85 per cent of adults and handles over 1.2 billion transactions annually. Poland’s BLIK runs at more than 180 million transactions per month. These are not niche alternatives. In their home markets, they are the default.

Why is consolidation reshaping Europe’s pay-by-bank landscape?

The historic weakness of Europe’s A2A ecosystem has always been fragmentation. A Dutch consumer can pay with iDEAL at home but not in France. A Spanish Bizum user cannot split a bill with a German friend. Each system was built for a domestic market, with different technical standards, banking integrations and regulatory frameworks. For merchants selling across borders, supporting each one meant a separate integration.

That is now changing through two parallel forces: industry consolidation and interoperability agreements. On the consolidation side, 2025 saw two landmark deals. TrueLayer, Europe’s leading pay-by-bank network, acquired Nordic specialist Zimpler, bringing together more than 20 million users across 22 countries with deep integration into Sweden’s Swish rail. Mollie, a major European payment provider, agreed to acquire GoCardless, the UK-based bank payment specialist, in a deal expected to close in mid-2026. Both acquisitions follow the same logic: combine national A2A expertise into a single platform that merchants can access through one integration. As we explored in our analysis of Europe’s payments industry landscape, fintechs do not need to replace Visa and Mastercard at the network level — they just need to own the customer interface.

On the interoperability side, the EPI-EuroPA agreement signed in February 2026 connects Wero with Bizum, Bancomat, MB WAY, Vipps MobilePay and others into a network covering 130 million users across 13 countries — roughly 72 per cent of the EU population. Cross-border peer-to-peer payments are targeted for 2026, with e-commerce and point-of-sale following in 2027. As we reported in our coverage of Europe’s $24 trillion breakup with Visa and Mastercard, the combined system aims to let Europeans pay across borders without touching a single American network.

What makes pay-by-bank a threat to card networks?

The economics are straightforward. Every card transaction generates interchange and scheme fees that flow to Visa, Mastercard and issuing banks. At continental scale, these fees amount to billions annually. A2A payments eliminate the card network entirely, replacing it with bank-to-bank rails that are cheaper, faster and — since October 2025 — mandated to settle in ten seconds at no extra cost under the EU’s Instant Payments Regulation.

For merchants, the savings are material. Pay-by-bank transactions typically cost 30 to 70 per cent less than card payments, with lower failure rates and no chargebacks. For subscription businesses, bank payments reduce involuntary churn caused by expired cards or failed renewals. For consumers, the experience is increasingly frictionless: authenticate via your banking app, and the payment is done. No card number. No expiry date. No CVV.

The UK is moving in the same direction. In February 2026, British banks including Lloyds, NatWest, Nationwide and Santander UK began meeting to develop a sovereign payments alternative, driven by fears that US access to Visa and Mastercard could be restricted. As we examined in our analysis of how fintechs are taking on Visa and Mastercard, 95 per cent of UK card transactions run through American-owned systems. Variable Recurring Payments — allowing pay-by-bank for subscriptions — are expected to launch at scale in Q1 2026 through the newly formed UK Payments Infrastructure body.

What are the remaining barriers to mass adoption?

The biggest is consumer habit. Visa and Mastercard benefit from an entrenched network effect: merchants accept them because consumers carry them, and consumers carry them because merchants accept them. Breaking that loop requires either regulatory intervention or a critical mass of users large enough to make merchants care.

Refund and dispute resolution processes are also less mature in A2A than in card networks, where chargeback rights are well established. The lack of a universal loyalty and rewards layer — something cards have built over decades — means pay-by-bank must compete on cost and convenience alone, at least for now. And while the EPI-EuroPA interoperability hub promises cross-border functionality, the technical integration is not yet complete. As we explored in our analysis of Europe’s payments sovereignty strategy, fragmentation has killed every previous attempt at pan-European payment unification.

But the momentum is structural, not cyclical. The Instant Payments Regulation has made the underlying rail mandatory and free. Open banking under PSD2 — and soon PSD3 — gives fintechs legal access to bank accounts. The consolidation wave is building the commercial infrastructure on top. And geopolitical anxiety about American control of payment systems is providing the political will that earlier efforts lacked. As we reported in our coverage of the euro stablecoin consortium, European banks are investing in alternatives across every layer of the payments stack.

Pay-by-bank is not going to replace cards overnight. But it does not need to. Every transaction that moves from card rails to A2A rails is one that no longer pays a toll to Visa and Mastercard. At the rate Europe is moving, the toll booth is getting quieter by the month.

Frequently Asked Questions

What is pay-by-bank and how does it differ from card payments?

Pay-by-bank, also known as account-to-account (A2A) payment, moves money directly from a customer’s bank account to a merchant’s without using card networks like Visa or Mastercard. Transactions run on SEPA instant payment rails, settle within ten seconds, and typically cost merchants 30 to 70 per cent less than card payments. The EU’s Instant Payments Regulation, fully enforced since October 2025, makes this infrastructure mandatory and free across the eurozone.

How big is the pay-by-bank market in Europe?

A2A payments accounted for 17 per cent of European e-commerce transaction value in 2024, with volumes growing at 30 per cent annually. The market is forecast to exceed €850 billion in transaction value by 2026. National systems already dominate their home markets: iDEAL holds 70 per cent of Dutch e-commerce, Bizum has over 30 million users in Spain, and Swish is used by 85 per cent of Swedish adults.

Why are European pay-by-bank companies consolidating?

Fragmentation has been the historic weakness of Europe’s A2A ecosystem — each country built its own system that could not work cross-border. TrueLayer’s acquisition of Zimpler and Mollie’s acquisition of GoCardless are creating pan-European platforms that merchants can access through a single integration. The EPI-EuroPA agreement is also connecting national systems like Bizum, Bancomat, MB WAY and Vipps MobilePay into an interoperable network covering 130 million users across 13 countries.