ACI Worldwide, the global real-time payments software provider, has released a new report in partnership with GlobalData, the data and analytics company. The report titled ‘2023 Prime Time for Real-Time’ looks at new sophisticated use cases for consumers and businesses that are driving global real-time payments (RTP) volumes to record highs, with 195.0B RTP transactions recorded globally in 2022 — a YoY growth of 63.2 per cent.
511.7 billion real-time transactions globally are forecast by 2027. This represents a 2022-2027 compound annual growth rate (CAGR) of 21.3 per cent.
By 2027, RTPs are expected to account for 27.8 per cent of all electronic payments globally.
India remains the undisputed RTP leader, with a staggering 89.5 billion transactions in 2022. It had a YoY growth rate of 76.8 per cent. India accounted for 46 per cent of all global real-time transactions in 2022.
Brazil was the third fastest-growing RTP market in 2022, with a YoY growth of 228.9 per cent. It is in second place in transactions, with 29.2 billion in 2022. This represents 15 per cent of all global real-time transactions.
China, Thailand and South Korea are third, fourth and fifth, respectively, on the list of the top RTP markets, with 17.6 billion, 16.4 billion and eight billion transactions, respectively, in 2022.
Governments and regulators are taking notice of consumer adoption
Merchant acceptance of RTPs on the rise, as consumers and businesses around the world demand cheaper, faster and more efficient ways to pay. Consumer and business adoption via popular new use cases are heating up. This year’s Prime Time for Real-Time report analyses RTP transactions per head of population per month for the first time. It highlights where consumers and businesses most actively use RTP:
Bahrain, a country of just 1.5 million people, is forecast to have the highest level of RTP consumer adoption by 2027. It is projected to have 83.3 RTP transactions per head per month.
Consumers in Brazil (#2) and Thailand (#3) are expected to make 51.8 and 43.6 RTP transactions per month, respectively, by 2027.
Four European countries are forecast among the top 10 countries for RTP consumer adoption by 2027. These are Netherlands, Sweden, Denmark and Finland.
The UK, Canada, the US, Germany, France and Italy — all top 10 global economies by GDP — are forecast to place 17, 19, 33, 34, 35 and 42, respectively, for consumer adoption in 2027.
“This year’s report highlights how consumer and business adoption of real-time payments accelerates when the conditions are right,” said Craig Ramsey, global head of real-time payments and banking, ACI Worldwide.
“The countries at the top of our league table — Bahrain, Brazil and Thailand — are all relatively recent enablers of real-time payments. Concerted industry collaboration and government mandates, widespread merchant adoption, strong brand recognition for a scheme, and related services, such as digital wallets, have provided the perfect combination for strong growth in these markets,” Ramsey concluded.
EU action vs US action
Governments and regulators in other countries are beginning to take notice and have launched initiatives to emulate the success of the most successful RTP markets.
In Europe, the EU Commission has proposed a law mandating RTPs across its 27 member states. The UK has embarked on its New Payments Architecture program. This aims to modernise the country’s RTP rails. In the US, the Federal Reserve recently announced the launch date for its highly anticipated FedNow service to expand RTP access in the US. This was a highly significant event in a market where regulators tend to lean toward non-intervention.
“Real-time payments are the future of modern, digital economies. Governments and regulators around the world are beginning to understand this and increasingly see them as a path to drive economic growth and financial inclusion,” said Thomas Warsop, interim president and CEO, ACI Worldwide.
“Real-time payments will help to secure the competitiveness of banks and financial services providers. They remove payments friction, contribute to greater liquidity and ultimately increase customer stickiness. They complement the holistic digital proposition of modern financial institutions.
“Banks should evaluate whether they are truly maximizing existing real-time rails in their market. Ultimately, the extent to which they make real-time payments part of their offering is a strategic decision. It seems increasingly clear, however, that limiting their commitment to the minimum also means limiting their potential share of the future payments market,” Warsop concluded.
Regional Spotlights
North America: July’s U.S. FedNow launch will be a major catalyst for growth
RTP transactions in North America are expected to grow from 3.9 billion in 2022 to 13 billion by 2027, a CAGR of 27.3 per cent. North America currently accounts for just two per cent of all RTPs globally. Despite this, it has the potential to develop into an extremely high-growth region in the future.
As a proportion of electronic payments, RTPs are forecast to be just five per cent by 2027 in North America. This is lower than all other global regions: Europe (13 per cent), Asia Pacific (APAC – 12 per cent), Middle East, Africa and South Asia (MEASA – 79 per cent) and Latin America (LATAM – 56 per cent).
Consumer adoption, measured as transactions per month per head of population, was low across the region in 2022. The US and Canada ranked 33 and 19, respectively, worldwide.
Mobile wallet adoption is strong and growing fast, with 45 per cent of consumers holding and/or using a mobile wallet in 2022. This was compared to 38 per cent in 2021 and just 13 per cent in 2018.
Overall fraud rates remain flat, as 28 per cent of consumers reported being a victim of fraud in 2022, compared to 26 per cent in 2021. Social engineering scams and digital wallet account hacks are the only fraud types that grew from 2021 to 2022. This speaks both to the increased adoption of digital payments and the corresponding evolution of fraudsters’ tactics.
The launch of FedNow in the US in July 2023 could be a major catalyst for RTP adoption. It will expand RTP access to smaller banks and feature new services, such as Request for Pay, from day one.
Europe: Major change is on the horizon with the new EU RTP mandate
RTP transactions in Europe are expected to grow from 13.2 billion in 2022 to 34.2B by 2027, with a CAGR of 21 per cent.
Four European countries feature in the global top 10 for consumer adoption for 2027 — Netherlands, Sweden, Finland and Denmark.
Mobile wallets are increasingly popular, with 41 per cent of consumers holding and/or using a mobile wallet in 2022. This is compared to 31 per cent in 2021 and 12 per cent in 2018.
Overall fraud rates are stagnant or in decline. However, social engineering scams associated with Authorised Push Payment (APP) fraud are on the rise.
Major change is on the horizon. The EU Commission has proposed to mandate RTPs across its 27 member states. Banks must offer instant payments at the same cost or lower than standard credit transfers. The proposed law would disrupt the market significantly. This is because currently, charges of up to EUR 1.50 are common for instant payments.
LATAM: Top growth market with Brazil the clear leader in adoption and growth
LatAm is one of the top growth regions globally. RTP transactions are expected to grow from 33 billion in 2022. The prediction is 119.5 billion by 2027, a CAGR of 29.3 per cent.
The region is forecast to have one of the highest proportions of RTPs as a portion of electronic payments by 2027 (56 per cent). Brazil has become a major global player in RTPs and is responsible for 90 per cent of RTP volumes in the region due to the strength of PIX.
Brazil was the world’s second-biggest RTP market by volume in 2022.
Brazil is second in global RTP consumer adoption, behind India. The majority of its population has access to the RTP service PIX via mobile, and Brazil is expected to have 52 RTP transactions per head of population per month by 2027.
Mobile wallets have exceeded a critical mass in the region. Sixty-five per cent of consumers are holding and/or using a mobile wallet in 2022. This is compared to 58 per cent in 2021 and 15 per cent in 2018.
Social engineering scams associated with APP fraud have risen to comprise 27 per cent of reported fraud incidents in LatAm in 2022. This is up from 16 per cent in 2021. Card details stolen online dropped from 20 per cent to 13 per cent in the same period.
Growing markets to watch in LatAm include Mexico, which for the first time is among the world’s top RTP markets (#9). This is as well as Peru, Argentina and Colombia, which feature on the list of the world’s top 10 growth markets.
APAC: Leads the world in terms of real-time, cross-border initiatives
APAC is one of the most innovative RTP markets. Advanced, user-friendly services and features such as QR-code payments and mobile-native experiences are driving adoption across the region.
RTP transaction volumes in the region are expected to grow from 49.2 billion in 2022 to 96.7 billion by 2027. This is a CAGR of 14.1 per cent, while APAC’s nations are at different stages of real-time payments implementation.
China, Thailand and South Korea are third, fourth and fifth, respectively, in the ranking of the world’s biggest RTP markets.
Indonesia is the latest major country in the regions to adopt RTP. It is set for rapid real-time payments growth at CAGR of 81.9 per cent between 2022 and 2027.
Most APAC countries have had real-time payments schemes in place for a few years. Projected five-year growth is continuing and accelerating, with CAGR for Malaysia at 19.7 per cent, the Philippines at 18.7 per cent, Singapore at 18.3 per cent and Australia at 16.3 per cent. This robust growth is driven by the regular launch of new products by these schemes.
Three APAC countries — Thailand, South Korea and Malaysia — feature among the top 10 for consumer adoption. Thailand takes the top spot in 2022. Thailand remains strong in driving RTP volumes, including bulk real-time payments.
Governments and central banks in the APAC region play a key role in adoption. There has been strong push from the governments of APAC countries for RTP adoption. This is enabling the industry to adopt digital payments. Especially in countries like Indonesia and Malaysia.
Several cross-border RTP integrations are live between APAC countries, and more are in development.
Consumers in APAC are the most avid users of mobile wallets. Eight out of the top 10 APAC countries are for mobile wallet adoption.
MEASA: Fastest-growing market globally due to the might of India
MEASA is a huge and diverse RTP market, with India as the world’s undisputed RTP leader, the Middle East as one of the fastest growing regions, and Africa as a key growth market to watch.
The region saw 95.7 billion RTP transactions in 2022, mainly due to India’s dominant role. RTP transactions are expected to grow to 250 billion by 2027, a CAGR of 21.2 per cent.
In 2022, 46 per cent of all global RTP transactions originated in India. Volumes reached a new high of 89.5 billion in 2022, representing 81 per cent of electronic payments in India. They are forecast to grow at a CAGR of 21.3 per cent between 2022 and 2027.
The Middle East is the fastest-growing RTP market globally. RTP transactions are expected to grow from 675 million in 2022 to 2.6 billion by 2027, a CAGR of 30.6 per cent.
Saudi Arabia is currently the biggest RTP market in the Middle East, followed by Bahrain.
Bahrain is the global leader in consumer adoption. It is forecast to have 84 RTP transactions per head of population per month by 2027.
Governments and regulators in the Middle East are setting new mandates for adoption. Several countries — including UAE, Qatar, Kuwait and Oman — are expected to launch domestic RTP schemes soon. Innovative features and overlay services are high on the agenda.
Nigeria is one of the top 10 RTP markets globally, and South Africa is Africa’s second biggest market, having launched RTPs in March 2023. This vast and rapidly growing continent is full of opportunity for RTPs. As a result, many African countries planning to develop and launch domestic RTP schemes.
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