The pandemic has cast a spotlight on the importance of robust instant payment infrastructures, with rates of adoption by consumers and businesses compressed accelerated ahead of all expectations. More than 70.3 billion real-time payment transactions were processed globally in 2020, a surge of 41 percent compared to the previous year, as the impact of COVID-19 dramatically accelerated trends away from cash and cheques toward greater reliance on digital technologies.
That’s according to a new report from ACI Worldwide and GlobalData, ‘Prime Time for Real Time,’ which tracks and analyses real-time payments volumes, growth and dynamics across 48 global markets. (Mastercard and ACI are working together to offer best-in-class central infrastructure, payments localisation and access solutions to central banks, scheme operators, financial institutions, payment service providers and other organisations launching real-time payments initiatives, starting with Cámara de Compensación Electrónica (CCE) in Peru.)
Around the world, real-time payments have enabled governments, working jointly with financial institutions, to accelerate much-needed disbursements and economic stimulus payments to their citizens. They have also enabled real-time liquidity to businesses that had to adapt to disrupted supply chains, while providing self-isolating people with faster, safer ways to reimburse neighbours and friends who have shopped for essential goods on their behalf. Real-time payments have opened up a world of potential to accelerate the global economy. Early indications suggest these new behaviours — and overall use of digital payments — will stick.
India retains the top spot in the Prime Time report with 25.5 billion real-time payments transactions in 2020, followed by China with 15.7 billion transactions; South Korea is in third place with 6.0 billion, then Thailand and the UK with 5.2 billion and 2.8 billion transactions respectively. Thailand’s PromptPay service is arguably the fastest growing, having reached approximately 78 transactions per capita in less than four years since launch.
The highest forecast rate of compound annual growth in real-time payment volumes between 2020 and 2025 is predicted in North America (36.5%), as both Canada and the U.S. modernise and drive their new real-time systems. Last year, Payments Canada selected Vocalink, a Mastercard company to build a state-of-the-art, real-time payment infrastructure that will bring faster, simpler, more flexible and convenient payments to Canada by 2022. Vocalink previously developed The Clearing House’s RTP® network in the U.S., a functionally rich system that went live in 2017. Both solutions are based on the highly successful and reliable Instant Payment Service, which now powers real-time economies in 14 of the top 50 markets by GDP, including the U.K., Singapore and Thailand.
As recently as a decade ago, it was a challenge for most consumers and businesses to make an immediate transfer of funds. Today, this capability is an everyday reality for billions of people worldwide. According to Mastercard analysis, there are now 59 live global real-time payments systems covering 63 different countries and territories. These markets account for the equivalent of more than nine tenths of global GDP. At least 60 percent of systems support advanced ISO 20022 message standards.
Real-time payments are no longer a novelty, but an expectation. Markets still in the nascent stages of immediate payments, yet to launch their real-time schemes, or even those looking to modernise their existing services can take important learnings from their peers and launch their offerings with future-proofed solutions that provide value, facilitate participation, grow adoption and enable future growth.