Depending on who you talk to, two, five or even 10 years’ worth of digital transformation has been jammed into 24 months or so of the Covid pandemic.
As lockdowns and other restrictions took hold, real-time digital platforms, services and experiences stepped into the void left by restrictions on their in-person equivalents. Not only are payments not an exception to this rapid digitisation, the faster — even real-time — movement of money through digital channels has been a vital enabler of this transformation.
Understanding and responding to this change is vital for the strategic planning of any organisation engaged in payments, incumbent financial institutions and fintechs alike. This makes ACI’s 2022 Prime-Time for Real-Time Global Payments Report, available now, perhaps the most important yet.
It is also the most comprehensive.
An unprecedented look at the economic impact of real-time payments
For the third year running, we’ve teamed up with GlobalData to produce in-depth market commentary and growth forecasts for an expanded cohort of 53 countries.
And, for the first time, proprietary research from the Centre for Economics and Business Research (Cebr) provides an unprecedented view of the economic benefits stimulated by real-time payments in a sample of 30 countries. Delivering detailed insights into how the use of real-time payments by corporations and financial institutions leads to an increase in productivity and uplift to the wider economy, this research adds holistic, evidence-based coverage of the economic value of real-time payments at the national and global economy levels.
Snapshot: Growth and adoption insights from ACI’s 2022 Prime-Time for Real-Time Global Payments Report
The report reveals the way in which real-time transactions are coming to dominate how we pay for goods and services, and the substantial economic value unlocked as a result. It shows that by 2026, approximately 25 per cent of all electronic payments globally will be made through a real-time payments system.
Again by 2026, in the sample of 30 countries analysed by the Cebr, real-time payments are forecast to facilitate additional economic output to the tune of $173billion in formal GDP. They are also forecast to drive $184billion in aggregated net savings for consumers and businesses.
Additional insights into global growth and adoption of real-time payments from this year’s report include:
- Global real-time payment transactions hit an estimated 118 billion in 2021, with a compound annual growth rate (CAGR) of 29 per cent
- 45 per cent of those 118 billion transactions occurred in India and MEASA; 34.6 per cent occurred in Asia Pacific, with China accounting for the majority.
- In MEASA (Middle East, Africa and South Asia), real-time payments are expected to make up 80 per cent of all electronic payments by 2026. By comparison, the EU’s equivalent forecast sits below the global average at 12.5 per cent.
- The fastest-growing region in terms of volume is South and Central America. In the early stages of conversion to electronic payments, the region has a predicted CAGR of over 50 per cent from 2021 until 2026.
- Predicted CAGR for real-time payment volumes over the same period in MEASA is 33 per cent.
- Europe’s CAGR for 2021-26 is 23 per cent, North America’s is 30 per cent and Asia Pacific’s is 15 per cent.
- India remains the world’s star player when it comes to real-time payments adoption. Already representing 75 per cent of electronic payments, real-time is expected to grow in India at a CAGR of 33.5 per cent until 2026 to touch 90 per cent.
Growing cloud adoption heralds new wave of competition for fintechs
As living and working converges onto digital experiences, offering real-time payments is about more than enabling new ways of paying. It is about embedding payments within these experiences in order to enhance those journeys, improve their convenience and increase their value. As such, the fintech space is where the real action happens — and the competition is set to intensify dramatically.
A recurring theme of the report is how incumbent financial institutions are closing the agility gap on fintechs, turning to the cloud to level the playing field in terms of time to market on new payment experiences. By freeing these well-resourced organisations to focus on developing added-value payment features and functions, on top of standardised infrastructure and services, competition will increase. So too will the industry’s overall maturity when it comes to using data to improve the customer experience.
The beauty of a report that is so comprehensive in both its breadth and depth is that there is ample scope for readers to draw their own conclusions, both about what this means for their current and future business strategies and the payment modernisations they may entail.
Among our own conclusions is the contention that, as accelerated innovation and better data lead to more relevant use cases, the flywheel of real-time payments growth will develop a self-sustaining momentum.
As a result, the future development of the payments industry will mirror the wider worlds in response to digital acceleration. Meaning, if it isn’t real time, it isn’t relevant.