Supporting Instant Account-to-Account Transfers at Scale
The demand for instant account-to-account (A2A) transfers is growing rapidly. Unlike the processing of credit cards and bank checks, A2A is a direct transfer of funds from one account to another, whether person to person, person to business, or business to business. Apple Pay, Google Wallet, Venmo and other similar apps are examples of leveraging open banking to enable A2A transfers. The key benefit of A2A is speed, as the transfer takes place instantly in most cases and is significantly faster for more complex scenarios with intermediary services, such as BACS (Bankers' Automated Clearing System) or Swift SWIFT (Society for Worldwide Interbank Financial Telecommunication), which still often rely on end of day batch settlement. (It’s worth noting here that cross-border A2A transfers can also take significantly longer because of the need for advanced security checks and confirmation of bank liquidity against central bank reserves.)
In addition to speed, the elimination of intermediaries reduces the cost of A2A processing, resulting in savings that can be passed on to customers. A2A-enabled instant payments also offer customers convenience, for example, easy access through mobile apps, improved account management, and the peace of mind of knowing payments will arrive on time. A2A transfers even increase security because they are encrypted and based on secure channels, reducing the possibility of errors and fraud.
With A2A transfers spurring it on, the global real-time payments market is projected to grow from $18.29B in 2023 to $284.49B by 2032. While the Asia-Pacific region currently leads in adoption, North America is emerging rapidly, driven by demand for mobile-based payment solutions and the adoption of the FedNow® Service. A U.S. Bank study showed more than half of American companies are already using the RTP® network and the FedNow Service.
How GridGain Supports Instant Account-to-Account Transfers
While the A2A transfer process is relatively simple – customer initiates a transfer, bank authorizes it after account verification and fraud and security checks, bank moves the funds – each step is data-intensive and requires multiple API calls, putting tremendous pressure on a bank’s IT infrastructure as volume grows. To support the future of instant payments, a bank’s processing system must support:
- Real-time Data Sharing via APIs: GridGain's in-memory computing ensures data is readily available for real-time access and analysis, enabling instant transactions and smoother customer experiences.
- Scalability and Performance: As A2A adoption grows, the volume of data will increase exponentially. GridGain's unified, scalable architecture ensures ultra-fast processing of massive datasets, even during peak usage periods. GridGain’s increased performance and simplified management reduces the burden on both the database infrastructure and administration teams, lowering operational costs.
- High Availability: A2A transfers require constant system uptime to guarantee reliable access to financial data. GridGain's distributed architecture eliminates single points of failure, ensuring data is always accessible and services remain uninterrupted.
- Security and Compliance: Security is paramount in A2A transfers. GridGain prioritizes data protection with robust encryption, access controls, and audit trails, complying with the strictest regulatory requirements. GridGain includes a continuously learning AI/ML framework to detect and prevent fraud in real-time.
- Flexibility and Innovation: A2A transfers is just one new service in a dynamic environment where new applications and services are constantly emerging. GridGain's flexible platform allows businesses to easily adapt and innovate to keep pace with the evolving payments landscape.
To learn more about how GridGain’s unified real-time data platform can support A2A transfers at scale, read RESOURCE? for a quick primer, download this eBook, or contact us directly.