APP Fraud, Reimbursement and Open Banking in 2026: What Merchants Need to Understand Before Pushing A2A Harder

For years, merchants have tended to discuss account-to-account payments through a familiar set of advantages: lower acceptance cost, faster settlement and a cleaner bank-to-bank payment flow than cards can always provide. That framing is no longer enough. In 2026, A2A growth sits inside a more demanding protection environment, where open banking is expanding into more mainstream payment use while APP-fraud reimbursement and stronger fraud controls are reshaping how payment providers handle risk. The FCA said in February 2026 that open banking had passed 16 million active users, while presenting payments policy as a joined-up effort between the FCA and PSR under the National Payments Vision.

That matters because APP fraud is no longer only a bank-side issue that merchants can ignore while promoting pay by bank more aggressively. Once A2A moves further into everyday checkout, fraud risk, reimbursement expectations and PSP-side intervention start affecting merchant outcomes through customer trust, payment interruption, support burden and conversion behaviour. OBL’s pay-by-bank material explicitly frames open banking payments as moving into more everyday retail and ecommerce contexts, which makes these questions commercially closer to merchants than they were when A2A looked more niche.

The most important point is not that merchants suddenly become the reimbursing party. In most cases, they do not. The point is that the environment around A2A is changing. PSPs now operate under stronger APP-fraud obligations, stronger anti-fraud incentives and, in some cases, greater flexibility to delay suspicious payments while they investigate. That means merchants pushing A2A harder need a more mature strategy than “bank payments are cheaper and faster than cards.” They need to understand how trust, fraud controls and customer protection now shape the A2A journey itself.

A2A growth changes the merchant meaning of APP fraud

APP fraud has always mattered to payment providers and regulators, but it becomes more merchant-relevant when A2A is pushed further into mainstream checkout. The more merchants want customers to choose to pay by bank or other open-banking payment flows, the more those customers’ confidence in push payments affects conversion and payment behaviour. A customer does not separate “merchant adoption strategy” from “payment trust” as neatly as the industry sometimes does.

This is why the old framing starts to break down. When A2A was discussed mainly as an infrastructure improvement or as an alternative route for selected payment scenarios, merchants could treat fraud control as something happening elsewhere in the stack. But when open banking is being positioned as an everyday payment method, the trust profile of the rail becomes part of merchant performance, not just PSP compliance. OBL’s pay-by-bank article presents open banking payments as fast, secure bank-to-bank transfers authenticated in the banking app, which is exactly why the rail’s safety perception matters more once it reaches mainstream checkout contexts.

The merchant consequence is straightforward. If customers begin to associate push-payment flows with scam sensitivity, warning screens, payment pauses or uncertainty about what happens when something goes wrong, then the decision to push A2A harder stops being a pure cost-and-conversion decision. It becomes a trust-and-control decision as well.

Reimbursement changes the environment even when merchants are not the reimbursing PSP

One of the most important things merchants need to understand is that reimbursement rules can change the payment environment around them without making them the direct reimbursement party. The PSR’s APP-scams reimbursement requirement for in-scope Faster Payments and CHAPS claims took effect on 7 October 2024, and the PSR’s 2025 consolidated policy statement makes clear that this is now a live operating framework, not a future proposal.

The rule may sit with PSPs, but the experience reaches merchants

Once reimbursement becomes mandatory, PSP incentives change. Prevention matters more. Investigations matter more. Claims handling matters more. So do warning design, suspicious-payment monitoring and account-level control quality. Even if the formal obligation sits primarily with sending and receiving PSPs, the merchant still feels the consequences through the payment journey customers encounter.

The post-implementation figures show this is not a symbolic shift. The joint FCA/PSR response published in December 2025 said that, in the first ten months after implementation, 88% of money lost to in-scope APP scams had been returned to victims, 83% of claims had been closed within five business days, and claims volume was around 15% lower than in the comparable earlier period. The PSR’s January 2026 dashboard reported the same 88% reimbursement rate and a similar reduction in claims volume. That suggests the regime is materially changing incentives and outcomes across the ecosystem.

For merchants, the significance is indirect but real. A PSP operating in a tougher reimbursement environment may become more interventionist, more cautious or more selective in how it treats suspicious A2A payments. That can affect payment timing, customer reassurance, exception handling and the overall ease of using A2A as a checkout rail. So even if the merchant is not writing the reimbursement cheque, reimbursement still changes the commercial context in which the merchant is asking the customer to pay.

Why stronger APP-fraud controls can change the A2A checkout experience

The next merchant issue is not reimbursement alone, but how fraud controls reshape the live payment journey. The UK’s 2024 Payment Services amendment rules were specifically designed to give PSPs more time, in certain suspicious-payment scenarios, to investigate and contact the payer. The government’s impact assessment says the changes allow PSPs to slow processing where they have reasonable grounds to suspect fraud or dishonesty and need additional time to contact the payer or gather third-party information. It also says the policy was intended to help PSPs “break the spell” of fraudsters while limiting the impact on legitimate real-time payment flows.

This matters because it introduces a tension that merchants cannot ignore. A2A and pay by bank are often promoted as faster and cleaner than cards. But stronger APP-fraud controls may make some A2A journeys more interruptible, more caution-heavy or more context-sensitive than simple “instant bank transfer” messaging suggests.

None of this means A2A becomes commercially unattractive. It means merchants need a more realistic view of how the payment journey may behave under a stronger anti-fraud regime. The smoother rail on paper may not always feel smoother in practice if fraud-control pressure increases the frequency of warnings, pauses or extra verification moments.

Customer trust in A2A matters more when fraud risk becomes more visible

Merchants sometimes treat trust as a general brand question and fraud as a provider-side operations question. In A2A payments, those two issues are increasingly linked. If the customer perceives push-payment flows as more fraud-sensitive, less forgiving or more likely to require intervention, that perception becomes part of the merchant’s checkout challenge.

Faster and cheaper only work if customers still trust the rail

This is why customer trust now matters more in A2A strategy than many merchants realise. OBL’s pay-by-bank positioning emphasises speed, security and ease of use. That is persuasive only if users continue to believe the rail is trustworthy enough to use without unusual caution. The more APP fraud becomes publicly associated with push-payment risk, the more merchants have to think about whether cost and speed arguments alone are enough to drive adoption.

The merchant implication is not that customers will reject A2A. It is that merchants need to account for the behavioural side of trust. A2A adoption works best when the customer feels both that the payment is efficient and that the payment environment is protecting them appropriately. If those two feelings drift apart, conversion can weaken even when the underlying payment method is technically strong.

That is why APP fraud matters more as A2A grows. Once open banking moves from innovation story to everyday payment story, fraud visibility becomes part of merchant performance.

PSP and bank-side fraud quality becomes part of merchant payment strategy

Another point many merchants underestimate is how much their A2A outcomes depend on provider-side fraud quality they do not fully control. The FCA’s fraud-controls comparison exists precisely because fraud outcomes are shaped by how banks and payment firms handle authentication, transaction monitoring, warnings, suspicious-payment review and customer communication. The FCA page states plainly that reducing fraud is a priority and that it provides information about banks’ fraud controls.

The details vary by provider, but the broader point is clear: customer protection quality is not uniform. Some firms emphasise real-time transaction monitoring, some emphasise warnings, some emphasise beneficiary setup alerts or customer contact on suspicious activity. The FCA’s later multi-firm review on APP fraud reinforced that firms need effective anti-fraud controls and highlighted both good practice and weaknesses in prevention and complaint handling. That means merchant payment strategy cannot be completely separated from PSP and bank-side control quality.

This matters more in A2A than some merchants assume because the customer is often relying directly on the bank-based payment journey to decide whether the payment feels safe. If fraud controls are weak, trust suffers. If fraud controls are strong but badly designed, friction can rise. In both cases, the merchant feels the result. That is why PSP quality stops being just a back-office procurement question and becomes part of merchant payment design.

A merchant pushing A2A harder therefore needs to think not only about pricing or coverage, but also about how fraud prevention, warnings, suspicious-payment handling and complaint resolution are likely to affect the user experience around that rail.

Open banking growth does not remove the tension between conversion and control

The temptation in 2026 is to tell a simple story: open banking is growing, pay by bank is becoming mainstream and A2A should therefore be pushed harder as the next great checkout lever. That story is incomplete because it ignores the control side of the environment.

A2A may scale, but not under a friction-free assumption

The FCA’s 2026 speech makes the opportunity case clearly enough: open banking has scale, and it has the potential to make payments faster, cheaper and more efficient. But the same broader policy environment also contains reimbursement enforcement, stronger fraud expectations and more explicit intervention tools for suspicious payments. Those developments do not cancel A2A growth, but they do mean growth will happen in a more controlled and trust-sensitive environment.

For merchants, this creates a real trade-off. The more aggressively they push A2A as a lower-cost, faster or more efficient alternative, the more they need to understand what that push looks like from the customer side when fraud controls and reimbursement incentives are intensified. A2A can still scale, but not under the assumption that its path to scale will be friction-free.

That is the mature merchant reading of 2026. Open banking growth remains real. A2A opportunity remains real. But the environment now rewards merchants who understand the control-and-trust side of the rail, not only the commercial upside.

What merchants should actually evaluate before pushing A2A harder

Before turning pay by bank into a more aggressive growth lever, merchants need to evaluate more than headline cost or settlement speed. The most important questions now sit around trust, control quality and how the reimbursement-era A2A environment behaves in practice.

This is where strategy becomes more mature. A merchant that looks only at A2A’s commercial benefits may push too hard and misread rising friction, support contacts or payment abandonment as a user-education problem. A merchant that understands the reimbursement-era environment can design more realistically around how customers and PSPs are likely to behave.

The strongest question is not “Can A2A save money?” It is “Can A2A scale in this checkout flow while preserving enough trust, clarity and control quality that customers still want to use it?” In 2026, that is the question that separates mature A2A strategy from simple lower-cost enthusiasm.

Conclusion

APP fraud matters more to merchants in 2026 because A2A and pay by bank are moving further into everyday commerce. Once that happens, fraud risk, customer protection and reimbursement no longer sit neatly outside merchant strategy. They become part of how the payment rail performs in practice.

The reimbursement regime and stronger anti-fraud controls are changing the environment around open banking payments, even when the merchant is not the formal reimbursement party. PSP behaviour, customer trust and suspicious-payment intervention all become more relevant to conversion, support and payment experience.

The strongest merchants will still take A2A seriously. But they will do so with a more mature view of the rail. They will understand that pay by bank is no longer only a faster-and-cheaper story. It is also a trust-and-control story, and the businesses that grasp that early will be better placed to push A2A in ways customers will actually accept.

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