Despite discrepancies in growth between regions, and ongoing barriers to full adoption, it’s estimated that up to half of B2B payments will be made in real-time by next year. Azimkhon Askarov, Co-partner of CONCRYT, looks at the global RTPs landscape, and why those lagging behind should work to catch up.
We live in an age of immediacy. Products and services can be delivered faster than ever, leaving consumers and businesses alike somewhat impatient. It was only a matter of time before payments got up to speed.
By facilitating the immediate transfer of funds, 24/7, real-time payments (RTPs) are transforming financial transactions for businesses and redefining how we move money. But the global RTPs landscape is a diverse one, with some regions leading the change and others still lagging behind.
Regional variations
Many countries have now implemented their own real-time payments systems, each with unique characteristics shaped by local regulations, banking infrastructure and the needs of the local economy.
India has been leading the way in global real-time payments adoption, but Brazil seems determined to catch up. In fact, Latin America as a whole is expected to see a nearly fourfold increase in the volume of real-time payments by 2027.
The success of fast-payments systems like Transferencia 3.0 in Argentina, PIX in Brazil, and SPEI in Mexico has led to impressive growth, enabling consumers, workers, and suppliers to operate online, backed by robust payment systems. In fact, the success of PIX in Brazil has inspired neighbouring countries, with Argentina, Bolivia, Mexico, El Salvador, Peru and Costa Rica all rolling out some form of instant payments. Most recently, the Central Bank of Colombia has announced a partnership with ACI Worldwide to power its new domestic real-time payments system which is set for launch in 2025. The system will serve as the base layer for all current and future real-time payments schemes.
Smaller countries like El Salvador, Panama, and Costa Rica are also promoting real-time payments through initiatives like Transfer365, Wallet 2.0, and Since Mobile. Bolivia, too, introduced QR BCB to drive QR payments in the country. All this means instant payments are surging by a staggering 55% each year across the region.
Conversely, the projected CAGR for RTPs volume in South Korea and China is expected to remain at single-digit and low double-digit percentages by 2027, and the U.S. doesn’t even rank in the top 10 countries with respect to real-time payments transactions per person per month.
But there are plenty of incentives for the U.S. and others still lagging behind to make up ground in the RTPs race.
Why embrace RTPs?
RTPs not only enable businesses to receive funds immediately after a transaction is made, significantly improving cash-flow management, they increase efficiency and productivity. The immediacy of RTPs eliminates the need for manual intervention in payment processes, increasing overall operational efficiency. Furthermore, RTPs are not constrained by traditional banking hours, and operate 24/7, allowing businesses to send and receive payments at any time.
RTPs systems can also carry more data than traditional payment methods, providing businesses with valuable and actionable insights.
But perhaps most importantly, customers who use RTPs enjoy the convenience of making instant payments anytime, anywhere. This can significantly enhance the customer experience, particularly in sectors such as e-commerce and software-as-a-service (SaaS).
When designing real-time payments systems and experiences, payment providers must keep the customer experience front of mind, ensuring it is positive and seamless. For businesses, the adoption of RTPs presents a real opportunity to optimise cash flow management, simplify administrative processes and create a more seamless customer experience. But to make full use of these benefits, businesses and governments need to take investment in the RTPs infrastructure seriously.
