More than half a trillion real-time payments transactions will be processed over the next five years, according to Prime Time for Real-Time, a new global report from ACI Worldwide and Global Data. This industry-first research, which analyzes global real-time, account-to-account payment volumes and forecasts across 30 global markets, projects a Compound Annual Growth Rate (CAGR) of 23.4 percent from 2019 to 2024.
According to the report, India is also set to lead the world in the next five years in overall real-time payments volumes as real-time payments transaction volumes are set to grow from 15.3 billion in 2019 to a staggering 52.8 billion in 2024.
The new report outlines the five strongest indicators of a market’s real-time payments success. A national system or individual country does not need all of these indicators in place for initial adoption, but a combination of two or more is enough to drive the initial growth explosion.
- Centrally Driven Payments Modernization Initiatives—The backing of a motivated market force, whether governmental or collaborative stakeholders, is key for countrywide change—as countries like India, Nigeria and Malaysia have proven.
- Seamless and Integrated Payments Experience with Rich Overlay Services—End users want convenience, and unsurprisingly, real-time growth is strong where access to easy-to-use payment types exists for both business and consumer users.
- Connected Ecosystem of Players Enriching User Experience—When a market has broad ecosystem acceptance, combined with the convenience of rich overlay services and strong functionality, real-time payments can grow explosively.
- Digital Payments Maturity Level and Ingrained Payment Habits—In regions with historic reliance on paper-based payments such as cash and checks, real time provides an easy digital alternative—and when this shift is backed by a government initiative, adoption can be significant.
- Openness to Alternative Payment Methods—Alternative payment methods like mobile wallets continue to surge. Adoption is greater when real-time overlay services are offered, particularly the integration of real-time payment capabilities within mobile wallets.
“Recent events have given digital payments mainstream attention, and faster access to funds for individuals and small business has never been more critical,” said Jeremy Wilmot, group president, Banks & Intermediaries, ACI Worldwide. “The financial inclusion benefits of payments digitalization, including the launch of real-time payments, should not be overlooked, and they should be considered in tandem with national and global economic benefits. We see that internet access is now a necessity, and the ability to transact online is inextricable from the need for connectivity. Everyone needs to be prepared to handle the growth of real-time transactions, as well as digital and alternative payments and non-financial transactions.”
Additional Key Findings
- India has demonstrated robust centrally driven payments modernization initiatives giving it an edge over the rest of the countries. Furthermore, UPI has witnessed phenomenal growth in P2P transactions with volumes and the number of transactions growing exponentially. One of the key factors in this “hockey stick” upward trajectory was India’s choice to implement a four-party model for IP. This model is usually seen in mature card markets, but India reimagined this status quo to enable access to UPI services for banks, processors, merchants and fintechs.
- Additional key countries and regions to watch for real-time payments growth include the U.S. (42.1% CAGR growth), the Nordic countries of the P27 initiative (20.9% CAGR growth), ASEAN (39.0% CAGR growth) and Europe; these countries and regions already have one or more of the above indicators in place.
- Among the countries relatively new to real-time payments, Malaysia, Finland and Belgium are predicted to have the most exponential growth in the next five years, with an expected CAGR of 176.5 percent, 90 percent and 67.9 percent, respectively.
“Our research reveals that despite vastly different cultural, economic and technological factors, there are a number of traits that determine if real-time transaction volumes will see a rapid upward trajectory, and within what timeframe,” commented Craig Ramsey, global head of real-time payments, ACI Worldwide. “Recognizing the key indicators of real-time adoption (or further real-time growth) is critical to getting ahead of the competitive curve. These indicators suggest what needs to be done to unleash the potential of real-time payments and will empower stakeholders to make the right decisions.”