[BNPL for Business] Prime Time for Real-Time Global Payments Report

Real-time payments accounted for 266.2 billion transactions globally in 2023, a year-over-year (YoY) growth of 42.2%. This shift toward more sustainable growth levels is as expected as countries move beyond early adoption to maturity. The power of collaboration between governments, regulators, banks and fintechs is finally bearing fruit, resulting in wider domestic reach and exciting new use cases. Merchants and consumers are now embracing real-time payments through apps, QR codes and mobile wallets.
 
Across the world, real-time payments are addressing real-world challenges. They offer faster, cheaper, and more accessible and convenient payment solutions. Real-time payments reduce costs, improve liquidity for businesses, and enhance efficiency for banks. Governments and regulators in both established and developing markets are actively promoting real-time payments as a catalyst for economic benefits, driving financial inclusion and better transparency. ACI’s annual Prime Time for Real-Time® report, now in its fifth edition, provides valuable insights into the progress of real-time payments in 51 countries. It serves as a benchmark to help shape strategies, stimulate innovation, and encourage stakeholders to improve their real-time payment capabilities.

This year’s findings highlight a shift towards maturity in real-time payment markets, with 2023 reaching a record-breaking high of 266.2 billion transactions globally, representing a year-over-year growth of 42.2%. This indicates a move beyond the initial adoption phase, characterized by rapid growth, towards more sustainable growth levels. Key revelations include:
  • Collaboration among governments, regulators, banks, and fintechs is resulting in broader domestic reach and innovative new use cases.
  • Merchants and consumers are increasingly embracing real-time payments through apps, QR codes, and mobile wallets.
  • Countries with large populations, cash economies, low credit usage, and poor financial inclusion are leading the way in adopting real-time payments for daily use.
  • The next significant opportunity lies in developing real-time remittance and cross-border payment corridors to support international trade and migrations.
Globally, financial institutions are re-evaluating their payments infrastructure through the lens of real-time payments. Institutional leaders see real-time payments as a pathway to more efficient and lower-cost transactions, offering commercial advantages and better consumer engagement. Banking strategies are becoming more open and cooperative, with a strong desire to learn from other countries’ successes and to expand real-time ecosystems to include fintechs and other commercial players.

Markets where real-time payments are mainstream have valuable knowledge to share. This year’s report includes in-depth analyses of five of the world’s most successful real-time payment markets — India, Brazil, Indonesia, Malaysia, and the Netherlands. The success of real-time brands like India’s UPI and Brazil’s PIX demonstrates that consumers and merchants are ready to leverage the benefits of real-time payments, such as faster settlement, lower risk than cash, and better liquidity than cards.
Real-time payments are becoming ubiquitous globally. In 2023, nearly one-fifth of all electronic payments were real-time, and this is projected to exceed one-quarter by 2028. Achieving widespread acceptance is crucial for maintaining forward momentum. Reducing merchant discount rate fees and launching QR code-based and mobile use cases are among the most effective strategies for boosting adoption. Financial institutions must collaborate more closely with fintechs and digital wallet providers to offer the rich overlay services that drive frequent use and enhance customer experiences across various payment channels.

For late entrants and slow adopters in leading markets, it’s time to reconsider the role of real-time payments in the customer journey and the overall payments landscape. Opportunities to evolve and grow exist for financial institutions looking to monetize real-time payments by connecting multiple real-time schemes to create new corridors. 2023 saw numerous bilateral agreements in Latin America and Asia as neighboring countries began to establish real-time, cross-border rails for QR-code and P2P payments. G20 initiatives, EU Instant Payments mandates, and the Nexus blueprint will further drive this trend in 2024 and beyond.
Real-time payments are poised to play a more significant role in government economic growth initiatives by increasing access to and use of electronic payments, thus freeing up billions of dollars globally that are currently locked in clearance processes daily. ACI will publish the second edition of its Economic Impact Report in collaboration with the Centre for Economics and Business Research later this year.
The industry continues to make strides in combating payments fraud as part of the evolution of real-time payments. Generative AI is altering the nature and scale of attacks, and real-time payment systems are rising to the challenge with consumer rights initiatives, education programs, government interventions, and new AI-based anti-fraud technologies and processes. ACI plans to explore this topic in detail in a separate real-time fraud report in early 2025.

Real-time payments have become an integral part of the global payments landscape. As more markets adopt these systems, they should be recognized as a cornerstone for all strategies aiming at financial inclusion and economic growth. This report aims to provide the necessary impetus for continued modernization of real-time payments worldwide, benefiting financial institutions, corporations, merchants, and consumers with faster, cheaper, and overall better payment solutions.

It’s been a record-breaking year for real-time payments. Regulatory frameworks are being established, and the demand for real-time payments is increasing. Collaborative ecosystems are emerging, driving powerful use cases that revolutionize businesses and enhance daily lives. Adoption is driven by the need for low-cost, convenient, and accessible electronic payments, modern and efficient infrastructure, and a desire to boost economic performance. Mobile wallets and QR codes are facilitating quick entry points, connecting consumers to real-time payment rails both domestically and internationally. Real-time payments are unlocking economic, competitive, and operational advantages worldwide, and stakeholders are ready to reap the benefits.
In countries with thriving real-time payment ecosystems, five common success factors have emerged:
  1. Active Collaboration: Real-time payment systems thrive through active collaboration among financial institutions, payment service providers, central banks, government institutions, merchants, and third-party stakeholders.
  2. Strong Merchant Incentives: Merchant adoption is crucial for real-time payments growth. For example, India’s government removed merchant discount rates and issued QR codes for UPI acceptance, incentivizing merchants of all sizes to accept UPI payments.
  3. Open and Inclusive Payment Ecosystems: Fintechs and smaller banks play a significant role in leading real-time payment markets. Larger banks must re-evaluate strategies and form new partnerships with fintechs to remain competitive and drive transaction volume and value at scale.
  4. Constant Flow of User-Friendly Use Cases: Real-time payments thrive where innovative use cases have gained mass adoption. Whether paying utility bills, transport tickets, subscription payments, or groceries, consumers in successful markets are using real-time payments via QR codes, mobile apps, or online accounts.
  5. Cross-Border Ambition: Efforts to extend real-time payments to cross-border transactions are paying off, with Asian countries leading the way. For example, India’s UPI can be used in Malaysia, Indonesia, UAE, and France, and Malaysia’s DuitNow can facilitate QR-code real-time payments from Indonesia, Singapore, Thailand, and China.

(Soure: https://www.aciworldwide.com/real-time-payments-report)

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