Fast-Growing Real-Time Payments Means Big Opportunities – But They’re Unevenly Distributed

By: Julieth Posada Parra, ACI Worldwide

Real-time payments are entering a new and significant phase of growth.

Most major markets have real-time payment schemes already in place or in development. With the rails in place, the focus of governments, central banks and financial institutions has shifted to driving adoption — and therefore maximizing the economic benefits — through innovative new use cases.

On the whole, they’re succeeding. Globally, growth in real-time payments continues apace. Transaction volumes around the world grew 63.2% year on year in 2022 to reach a new high of 195.0B transactions. By 2027, real-time payments are expected to account for 27.8% of all electronic payments globally, up from 18% in 2022.

This growth, and the opportunities that come with it, are not uniformly spread across regions and individual markets. Asia-Pacific, for example, is the number two region by volume of real-time payments, with 50B transactions registered in 2022. But this masks the contrasting fortunes of the region’s individual markets when it comes to adoption. In the largest markets (Indonesia, Malaysia, Singapore and Thailand), low-value real-time payments are approaching a state of advanced maturity. Australia and New Zealand, meanwhile, have been comparatively slow out of the starting gate.

At the other end of the spectrum is Europe. Home to some of the world’s most established real-time payment systems, it is lagging far behind the rest of the world when it comes to growth. Despite rampant digital transformation across the continent in general, real-time payments in Europe, or instant payments as referred to locally, still make up less than 10% of the overall payments mix. 

Capturing growth requires connecting global trends with local insights

To drive adoption of real-time payments successfully and maximize the economic benefits of more efficient payments, decision makers in central banks, governments and financial institutions must understand the specific challenges and opportunities facing their own markets. And they must also connect those insights with learnings from the experiences of other markets.

This is the goal of ACI’s Inside Real-Time platform, a comprehensive video-led exploration of the state of real-time around the world, with series and reports featuring exclusive data from analysts at GlobalData.

In the previously mentioned Asia-Pacific region, where low-value real-time payments are approaching a state of advanced maturity, our analysis finds that the biggest growth opportunities lie outside of their borders. In the slower-growing Pacific markets of Australia and New Zealand, central banks and regulators are redoubling their efforts to kickstart adoption. Australia is rolling out new use cases — such as the highly anticipated PayTo, a new instant payments service — while in New Zealand, it’s full steam ahead on scoping out the market’s first real-time payments scheme.

Meanwhile, major change is coming to Europe that will push banks that have been taking a slow approach to real-time payments to make some big decisions. Just around the corner are European Commission directives on lowering the cost and increasing the accessibility of real-time payments, which will set in motion a new wave of growth. Private fintechs and other players from outside of traditional financial institutions are positioning themselves to claim as large a share of that growth as possible — at the expense of banks.

Major change is also coming to North America, where the July 2023 launch of the FedNow Service in the U.S. is expected to revolutionize how real-time payments are leveraged in the world’s largest economy. Our Prime Time for Real-Time report 2023 forecasts this will contribute to making North America the second fastest growing region over the next five years, achieving a compound annual growth rate of 27.3% between 2022 and 2027.

Inside Real-Time also features detailed analysis of Latin America and the Middle East, Africa and South Asia (MEASA) region. The former is the world’s fastest growing region by volume, and home to global real-time payments powerhouse Brazil, which is a case study in the power of maximizing the variety of use cases and streamlining integrations and partnerships with mobile services. MEASA, meanwhile, has truly leapfrogged cards. 73% of all electronic payments in the region are real-time — by far the world’s highest. With high mobile adoption across the region, our local experts are forecasting rapid growth and intensifying competition between banks and fintechs.

Each payments market is unique

This is just a snapshot of the global real-time payments landscape. In any given market, that landscape will always be uniquely influenced by the interplay between the regulatory environment and government (or central bank) policy on one hand, and the strategic decisions of banks, big tech and fintechs on the other.

Decision makers at any of these organizations and institutions looking to better understand how to drive real-time payments adoption in their market should head to Inside Real-Time,  “It’s Prime Time for Real-Time”, for additional insights and expert commentary.