It was a banner year in 2023 for real-time payments, with the global volume of transactions rising 42% YoY to a total of 266.2 billion, according to a new report.
The report — from real-time payments (RTP) software company ACI Worldwide, using statistics provided by research and consulting firm GlobalData — said the strong results set the stage for a period of more sustainable growth. It projected a 17% compound annual growth rate for RTP transactions through 2028.
The 2023 RTP volume represented just under one-fifth of all electronic payments globally; by 2028, that proportion is expected to exceed 25%.
India continues to be the heart of RTP, with 129.3 billion transactions last year, or almost half of the global total. That was up 45% from 2022. The vast majority (84%) of India’s electronic transactions are already real-time.
“Initiatives from no-fee accounts and digital IDs to pervasive QR codes and mobile wallets have paved the way for real-time payments [through India’s Unified Payments Interface system] and made them ubiquitous in daily life,” ACI noted.
While India is by far the largest RTP market, it did not experience the greatest growth rate in 2023. Among the five largest markets that distinction went to Brazil, where the total of 37.4 billion transactions was up 78% from 2022.
Brazil’s RTP system, PIX, “has taken Brazil’s real-time payments from standstill to sky high” in just three years, ACI wrote. “It owes much of its success to central bank regulation and a fintech-rich ecosystem.”
As for the United States, at present it’s a laggard in the RTP arena, with just 3.5 billion transactions last year that accounted for only 2% of the total payments volume.
According to the report, instant payments in the U.S. are negligible compared to paper-based and non-real-time electronic payments, which last year accounted for 18% and 81% of all transactions, respectively.
However, the projected CAGR of 32% transactions through 2028 is about twice the expected global growth rate. That ramp-up is largely due to the launch of the FedNow Service, a fully centralized instant payments infrastructure, and The Clearing House’s RTP Network.
“Growth will come more quickly in the coming years, but there is still a long way to go to reach levels of usage seen in some European markets,” ACI wrote.
Unsurprising, the greatest growth typically is seen in countries at the start of their RTP journey.
5 real-time payment success factors
The report identified five common drivers of success in countries that have developed real-time payment ecosystems:
1. Active collaboration: “Financial institutions, payment service providers, central banks, and government institutions must work together to build and operate real-time payment ecosystems,” ACI said.
2. Open and inclusive payment ecosystems: Fintechs and smaller banks play an increasingly significant role in the real-time payment systems of the world’s leading markets.”
3. Strong merchant incentives: “India’s government, for example, removed merchant discount rates and issued all merchants QR codes for UPI acceptance.”
4. Constant flow of user-friendly use cases: “Real-time payments thrive in countries where innovative use cases have found mass adoption by consumers or businesses, whether utility or tax bills, transport tickets or road tolls, subscription payments or the weekly grocery shop.”
5. Cross-border ambition: “Efforts to extend real-time to cross-border payments are finally paying off, and Asian countries are leading the way.”