Product Code: 66643
The Global Real-Time Payments Market is expected to register a CAGR of 33.5% during the forecast period. Real-time payments typically focus on low-value retail payment systems (RPS); they differ from real-time gross settlement systems (RTGS) and distributed ledger payment systems. In addition to meeting the demands and expectations, real-time payments have generated interest from regulators, competition authorities, and payment service providers. Regulators believe that instant payments will expand access to banking services, support economic growth, provide alternatives to Visa/Mastercard networks and reduce the use of cash and cheques.
- Smartphone adoption has reached 70% of the population in developed countries, while feature phones often replace cash and wallets in various developing economies. New domestic person-to-person (P2P) payment providers are coming forward regularly due to catalysts like social platforms, digital currencies, and near-field communication (NFC) based payments. Rapid technological change is driving rapid changes in the industry.
- The increasing focus on using advanced technologies and new business models in the Fintech sector, like open API-enabled real-time payment systems using mobile applications, has contributed to market growth. As per a study by Finastra, in 2021, Baas (Banking as a Service) is expected to grow by 25 % over the next three years providing various features to users embedded in the system like real-time payment, retail banking, etc. and 86% players in the market are planning to adopt open APIs to enable available banking capabilities.
- Modern economies depend highly on real-time payments to boost economic growth, prosperity, and financial inclusion, with governments worldwide as the primary enabler of these systems. Yet, in the coming years, shaping the future of payments will come down to the individual financial institutions that take advantage of the opportunities enabled by these new payment rails. In the world's top 5 developed economies USA, Canada, UK, France, and Germany, the Formal GDP Supported by Real-Time in 2021 is approximately USD 7.3 billion, equivalent to 0.02% of the combined GDP of the five countries, or the equal output of 70,464 workers across the five countries expected to reach USD 14.0 billion by 2026 equivalent to 0.04% of the combined GDP of the five countries, or the equivalent output of 118,989 workers across the five countries (As per the report by Cebr(centre for economics and business research)).
- In recent years one of the important drivers of real-time payments adoption has been a series of transformations in the daily lives of businesses and consumers. The transition to real-time living and a digital world of payments and work culture was already underway. Still, since 2021, the COVID-19 pandemic has accelerated the adoption of digital payments to new levels. Real-time prices offer businesses and consumers faster, cheaper, and more efficient ways of making financial transactions embedded into non-financial digital apps and services, with today's customers looking for a hyper-connected, frictionless customer experience.
- The real-time payment market has been increasing since covid 19; however, with the change, the world economies also need to create robust Regulatory reforms to avoid financial crimes. For Instance, the current banking structure still lags the optimal resources to fully implement and optimize the real-time payment infrastructure, which requires the adoption of global standards, such as ISO 20022 and SWIFT Corporate Access, in addition to the adaptation cost of new payment infrastructure and cyberattacks are some challenges the market has been facing in recent times.
Key Market Trends
P2B Segment Holds the Key to Drive the Market
- The P2B segment has driven the market in FY 2021 and accounts for approximately 68% of the global revenue share. P2B payments refer to monetary transactions between ( To or From) businesses and customers. The unabated growth of mobile-based transactions and e-commerce is a key factor driving the development of the segment.
- The continuous growth of online shopping and e-commerce sales is expected to drive the development of the segment. P2B payments allow businesses to improve customer satisfaction. The P2B structure has been picking up the pace with the change in regulatory reforms. Online and in-store bill payments promise the next wave of huge volumes needed to keep real-time costs cheaper than cards.
- For instance, the ongoing transition in the Nordic countries, led by Vipps (Norway) and MobilePay (Denmark and Finland). Both are being used in-store, and QR codes are linked to bank accounts. The P27 Nordic, Payments scheme makes it more beneficial, especially for merchants looking to reduce their outgoings from card fees in these mostly cashless economies.
- In the gig economy, the labour markets are characterized temporarily. Examples of jobs that comprise the (just-in-time workforce) include food delivery services, ride-hailing services (such as Uber or Bolt), house sitters, and dog walkers. Real-time payments make it big and beneficial to gig economy workers because workers are paid quickly, allowing them to better plan their finances without worrying about cash-related transactions.
- The increasing trends for cloud-based real-time payment solutions can be attributed to their flexibility in providing real-time payment insights to retailers. The growing adoption of digital payment methods in big retail stores across the globe is anticipated to drive the market in the forecasted period.
Asia Pacific will be the Fastest Growing Market
- Real-time transaction growth forecasts for emerging countries will be the key to taking the market to a new level, with countries like India leading the way and outpacing developed nations. Governments around the globe that enable real-time schemes are driving prosperity and economic growth by providing businesses and consumers with faster, cheaper, and more efficient payment methods.
- As per the (CEBR) Centre for Economics and Business Research, India accounted for the highest volume of real-time payments among businesses globally, with over 40% of all such payments made through 2021 originating in the country. India made 48.6 billion real-time payments through 2021 - which is around 2.6 times higher than China, which is in second place with 18.5 billion real-time transactions.
- According to the Centre for Economics and Business Research (CEBR), In 2021, net benefits for businesses and consumers of real-time payments hit USD 15,397 million, supported by real-time accounting for 5.7% of all transactions. Based on current real-time adoption levels in China, instant payments unlocked a total transaction value of USD 170,800 million per day in 2021 through a reduced float time. This working capital facilitated an estimated USD 12,411 million in business output in the same year.
- In Hongkong real-time payments share was recorded at 7.3% in 2021, which is estimated to triple (22.8% by 2026). The strongly predicted real-time uptake will result in consumer and business benefits reaching USD 260 million in 2026. The macroeconomic benefits of using real-time payments were an estimated USD 338 million of economic output (0.09% of formal GDP) in 2021, equivalent to the output of 3,355 workers.
- Indonesia last year launched its BI-FAST system late in December 2021, with its full launch in 2022. As a result, real-time payments will have no economic impact in 2021. However, the predicted maximum attainable benefit to Indonesian consumers and businesses from full adoption of real-time payments was estimated at USD 16,612 million for 2021, while expected macroeconomic gains of about an additional USD 34,716 million of economic output (2.9% of GDP) in the same year.
With consumer preferences changing rapidly, the Global Real-Time Payments Market has become a lucrative option and, thus, has attracted huge investments. Due to the huge growth potential, the market is moving towards fragmentation due to the new entrants. The service providers are engaging in partnerships to promote product innovation.
- April 2022 - Fiserv launched Appmarket for financial institutions, where they can access a curated set of fintech solutions to help them operate more efficiently, reach new customers, and compete more effectively.AppMarket will empower Fiserv financial institution clients and address emerging gig economy banking and crypto finance opportunities. Small and mid-size business (SMB) lending and other priorities.
- December 2021 - Indonesia launched BI-FAST, its first nationwide real-time payments network. The country's central bank requests that the country's financial institutions rapidly adopt and implement the underlying infrastructure. With real-time transactions set to rise to USD 1.6 billion in 2026, net savings for consumers and businesses are forecast to climb to USD 222 million, helping to generate an additional USD 747 million of economic output, equivalent to 0.05 % of the country's forecasted GDP.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
TABLE OF CONTENTS
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
- 4.1 Market Overview
- 4.2 Value Chain Analysis
- 4.3 Industry Attractiveness - Porter's Five Forces Analysis
- 4.3.1 Threat of New Entrants
- 4.3.2 Bargaining Power of Buyers
- 4.3.3 Bargaining Power of Suppliers
- 4.3.4 Threat of Substitutes
- 4.3.5 Intensity of Competitive Rivalry
- 4.4 Assessment of the Impact of COVID-19 on the Market
5 MARKET DYNAMICS
- 5.1 Market Drivers
- 5.1.1 Increased Smartphone Penetration
- 5.1.2 Ease of Convenience
- 5.1.3 Falling Reliance on Traditional Banking
- 5.2 Market Challenges
- 5.2.1 Payment Fraud
- 5.2.2 Existing Dependence on Cash
- 5.3 Market Opportunities
- 5.3.1 Government Policies Encouraging the Usage of Digital Payment is Expected to Aid the Growth of Real-Time Payment Methods
- 5.4 Key Regulations and Standards in the Digital Payments Industry
- 5.5 Analysis of Major Case Studies and Use-cases
- 5.6 Analysis of Real Payments Transactions as a Share of all Transactions with a Regional Breakdown of Key Countries by Transaction Volume
- 5.7 Analysis of Real Payments Transactions as a Share of Non-Cash Transactions with a Regional Breakdown of Key Countries by Transaction Volume
6 MARKET SEGMENTATION
- 6.1 By Type of Payment
- 6.2 By Geography
- 6.2.1 North America
- 188.8.131.52 United States
- 184.108.40.206 Canada
- 6.2.2 Europe
- 220.127.116.11 United Kingdom
- 18.104.22.168 Germany
- 22.214.171.124 Spain
- 126.96.36.199 Sweden
- 188.8.131.52 Finland
- 184.108.40.206 Rest of Europe
- 6.2.3 Asia Pacific
- 220.127.116.11 China
- 18.104.22.168 India
- 22.214.171.124 South Korea
- 126.96.36.199 Thailand
- 188.8.131.52 Japan
- 184.108.40.206 Rest of Asia Pacific
- 6.2.4 Latin America
- 220.127.116.11 Brazil
- 18.104.22.168 Argentina
- 22.214.171.124 Colombia
- 126.96.36.199 Mexico
- 188.8.131.52 Rest of Latin America
- 6.2.5 Middle East and Africa
- 184.108.40.206 United Arab Emirates
- 220.127.116.11 South Africa
- 18.104.22.168 Nigeria
- 22.214.171.124 Rest of Middle East and Africa
7 COMPETITIVE LANDSCAPE
- 7.1 Company Profiles
- 7.1.1 ACI Worldwide Inc.
- 7.1.2 Fiserv Inc.
- 7.1.3 Paypal Holdings Inc.
- 7.1.4 Mastercard Inc.
- 7.1.5 Montran Corporation
- 7.1.6 Temenos AG
- 7.1.7 Volante Technologies Inc.
- 7.1.8 Wirecard AG
- 7.1.9 FIS Global
- 7.1.10 Visa Inc.
- 7.1.11 Finastra
8 INVESTMENT ANALYSIS
9 FUTURE OF THE MARKET