Account to Account Payments and Europe's Push for Sovereignty, A Merchant's Moment

Kai Lindstrom, Vice President, Payments, SOK

A seasoned payments industry leader with two decades of experience, I specialize in merchant services, compliance, and innovation across POS, e-commerce, and mobile. From Swedbank Pay to Neste and OP Financial Group, I’ve driven growth, developed acquiring services, and led cross-border teams across Finland, the Baltics, and NW Russia.

In an exclusive interview with Banking CIO Outlook he shared invaluable insights on rise of account-to-account payments as a pivotal shift toward European payment sovereignty, costefficiency, and merchant empowerment.

Europe’s Payments Revolution, Merchants, Sovereignty, and the Rise of A2A

The rapid rise of account-to-account (A2A) payments marks a profound shift in the global payments ecosystem. By enabling real-time transfers directly between bank accounts, A2A challenges traditional card-based models that have long been dominated by global players like Visa and Mastercard.

What began as simple peer-to-peer solutions is now becoming a serious alternative for e-commerce, business transactions, and even in-store payments. For Europe, this evolution offers not just efficiency but an opportunity to regain control over its payments infrastructure.

The European Union has made no secret of its ambition to strengthen strategic autonomy in key sectors, and payments are high on that list. The current landscape is heavily reliant on non-European players, leaving the continent vulnerable to geopolitical shifts and commercial dependencies.

“The rise of account-to-account payments is more than just a shift in technology it’s a pivotal moment for Europe to reclaim sovereignty and reshape its financial future”

Previous attempts at building European alternatives like Payfair fizzled out. But the momentum now feels different. Projects like the European Payments Initiative (EPI) and EuroPA (including schemes like Bizum and Blik) are gaining traction. What’s changed? Timing, technological readiness, and perhaps a renewed sense of urgency in the face of global instability and rising platform fees.

This is not just about sovereignty. It’s about resilience, innovation, and making sure that European consumer, businesses, and banks don’t get locked into expensive or opaque systems run from elsewhere.

The Merchant Awakening

One of the most striking developments is the changing role of merchants. Traditionally, merchants have simply enabled whatever payment methods the banks and schemes provided and paid the associated fees. Now, they are demanding a seat at the table and a say in how payments evolve.

Tier 1 merchants in the Nordics have launched a cross-border initiative aimed at finding or co-developing more affordable and flexible A2A solutions. Their goals include transparent pricing, predictable cost structures, support for diverse use cases, and the ability to influence ongoing development. European merchant groups such as EuroCommerce have expressed support, and discussions with banks, fintechs, and payment schemes are well underway.

For merchants, the appeal of A2A is clear: lower fees. In some Nordic cases, A2A payment costs are reportedly one-third of those for Visa or Mastercard. For large retailers, even a partial shift to A2A could translate into millions in annual savings. And with ever-tightening retail margins, this matters.

But cost is not the only factor. At the point of sale, speed is critical. A2A providers must match or exceed the instant tap experience of contactless cards and mobile wallets. Delays at checkout risk lost sales, which can quickly outweigh transaction fee savings. If A2A is to truly break into physical retail, user experience must be seamless.

Can Banks Still Win?

For banks, the A2A transition may seem like a threat to existing revenue streams especially those tied to interchange fees. But it’s also a strategic opportunity.

By investing in A2A infrastructure either individually or through alliances banks can:

• Cut costs by avoiding legacy card rails

• Improve customer satisfaction with instant, secure payments

• Create new revenue streams through value-added services

• Regain control from third-party wallets and platforms

• Comply with open banking regulations and stay competitive in a rapidly changing ecosystem

Many banks are already moving. In the UK, Visa has introduced its own A2A solution. Several European banks are partnering with EPI or national schemes to accelerate development.

Consumers: The Last (and Hardest) Frontier

Convincing consumers to adopt A2A payments may be the toughest challenge. Most users are accustomed to frictionless card payments and mobile wallets. They don’t necessarily care whether a transaction costs a merchant 1% or 0.3% unless they personally benefit.

Therefore, A2A must offer not just parity but superiority in user experience. Incentives, loyalty features, and integration into everyday shopping journeys will be crucial. Countries where card usage has historically been low (e.g. India and Brazil) had an easier starting point, and their success stories UPI and Pix offer useful lessons. But Europe’s consumer habits require tailored solutions.

A Moment of Strategic Choice

The rise of A2A payments is more than a technical upgrade it’s a strategic crossroad for Europe. The chance to build a resilient, cost-effective, and user-friendly payment infrastructure is now within reach. But it will require collaboration, regulatory alignment, and the active involvement of all stakeholders, especially merchants and banks.

The good news? Momentum is building. The tools exist. And the incentives sovereignty, cost control, innovation have never been clearer. What remains is the will to execute.

Financial

Retail

Point of sale

POS