Across much of the world, the dominance of card networks in everyday payments is being quietly eroded by a new contender: account-to-account (A2A) instant payments.
Instant payments – slow to take off in US?
Systems like Brazil’s Pix and India’s Unified Payments Interface (UPI) have demonstrated how real-time bank transfers can lower costs, enhance financial inclusion, and give merchants greater visibility over their cash flow.
Yet in the US — home to two of the most powerful card networks in the world, Visa and Mastercard — adoption remains sluggish.
Last year, Visa and Mastercard processed $14.8 trillion and $9 trillion in transactions respectively.
Their ubiquity comes at a price: interchange fees charged to merchants, which are often passed on to consumers in the form of higher retail prices.
These fees have long sparked friction between merchants and payment processors, drawing regulatory scrutiny.
Visa, in particular, is now facing an antitrust lawsuit filed by the US Department of Justice over its allegedly exclusionary practices.
Instant Payment Promise
In contrast, instant payment platforms promise a direct route from payer to payee — no card rails required.
In countries such as Poland, Thailand and Malaysia, QR code-enabled A2A payments have scaled rapidly, offering real-time settlement at low or no cost to both merchants and consumers.
Brazil’s Pix, introduced in 2020 by the country’s central bank, has become a poster child for instant pay innovation.
It is now the country’s most-used payment method by volume, with more than 153 million Brazilians — around 75% of the population — actively using it.
According to Worldpay, Pix already accounts for more than one-third of Brazil’s total retail transactions.
India’s UPI, launched in 2016, is even more expansive, boasting over 360 million users and enabling billions of low-cost, instant transactions monthly.
Both systems have played a critical role in onboarding the unbanked, especially in rural areas, by eliminating the need for a payment card or even a traditional point-of-sale terminal.
Why Hasn’t the US Followed Suit?
Despite the clear advantages, real-time A2A payments have not yet gained meaningful traction in the US.
While services such as Zelle and Venmo are widespread, they are typically used for peer-to-peer transfers — splitting dinner bills or sending birthday money — rather than making purchases at shops or online.
Digital wallets like Apple Pay and Google Pay could, in theory, enable bank-to-bank payments.
But in practice, most users still link them to their credit or debit cards, preserving the role of Visa and Mastercard as the underlying payment processors.
FedNow, the Federal Reserve’s real-time payments initiative launched in 2023, was designed to break this dependency.
But early adoption has been limited. Consumers remain enamoured with the perks of credit cards — cashback, air miles, and extensive purchase protection — benefits that A2A systems currently lack.
Moreover, FedNow operates only within the US, with no cross-border capabilities. By contrast, Visa and Mastercard offer global coverage and decades of built-in fraud prevention.
While instant payments have gained remarkable traction globally, particularly in emerging markets, the US remains an outlier.
Until consumer incentives align in that market — and merchants, regulators, and banks unite behind a common framework — card networks will likely retain their iron grip on the American payments market.
The post Why are instant payments slow to take off in US? appeared first on Payments Cards & Mobile.