Countries all over the world are recognising that a vibrant digital economy requires the real-time movement of money. For providers to remain competitive versus traditional and new providers in their markets, they must enable and promote real-time payments among their customer base.

In a recent webinar sponsored by Mastercard and ACI Worldwide and moderated by Finextra’s head of research, Gary Wight, Mastercard’s George Evers, senior vice president of the Customer Solutions Group, joined panellists Craig Ramsey, head of real-time payments at ACI Worldwide and David McHenry, managing director and head of global treasury and payments advisory for EMEA at Silicon Valley Bank in a wide-ranging discussion of the challenges and opportunities that come with the growth of real-time payments around the globe.

The experts first explored how provision of real-time payments is growing in different countries and regions. “We no longer discuss real-time payments as something new”, opined Ramsey, noting that more than 50 countries and territories are currently live with real-time payments, and many more systems are in development. The pandemic, he noted, has meanwhile exemplified consumer and business demand for real-time payments and the touch-free experiences they enable.

“We expected growth, and then the pandemic created even more growth,” he noted. As detailed in a joint white paper, ‘Keeping pace in a global economy’, real-time transaction volumes are accelerating rapidly while values are decreasing — a powerful indication that these solutions are being adopted for day-to-day purchases in place of cash. ACI recently forecast there will be over half a trillion real-time payments processed by 2025.

But there’s value to be had beyond speed. “If we think back to the nineteenth and twentieth centuries when train tracks were being laid down, it wasn’t just for the joy of moving people across countries. They were there to enable a new way to do business; new relationships and new communities,” said Ramsay. And so it is for real-time payment rails. “It’s not having them that matters, but what you do to enable real-time commerce… and give consumers, merchants and corporate new ways to pay,” he added.

"It’s not having them that matters, but what you do to enable real-time commerce."
Craig Ramsay, head of real-time payments at ACI Worldwide

Countries in Asia and Latin America are leading the way, the panel agreed, when it comes to deploying and promoting real-time payments. In India, the real-time payment system processes as many transactions every two weeks as others do in an entire year; in Brazil, the number of real-time transactions surpassed one billion within six months of the new system going live. Many of these transactions are low values between friends and family, and to pay micro- and small merchants, where usage of digital payments is steadily displacing use of cash.

But “real-time is really just one aspect of it,” added Evers, talking more broadly about the modernisation of older, data-poor infrastructures with safer, more robust and more technologically advanced ones. “The opportunity to do much more across that network is one that should be grabbed, rather than just do the same thing faster.” He stressed the transformative capability of ISO 20022 data standards to transport more and better structured information before, during or after a payment or other transaction, especially for higher value transactions. One operator that is especially focussed on making best application of the standard’s extensive message set is The Clearing House in the US, where the past eighteen months have accelerated interest and adoption of request to pay-based digital billing and payment solutions, notably between corporates.

In closing, the panellists explored the role of the multiple players who are involved in emerging ecosystems, including the role of regulators and governments, to drive adoption of real-time payments among their customer base. McHenry observed that while closed loop providers such as Zelle in the US or WeChat Pay in China have grown up independently to meet rising consumer demand in absence of real-time payment infrastructures, “central authorities are very important in developing ubiquitous networks… to gain more acceptance.”

While competition among providers of real-time (or modernised) payment solutions fosters innovation and a better deal for the end user, collaboration between providers — both within markets and globally — is essential to ensure reach and inclusion for all participants. Only then will the true value of real-time payments be realised.