New sophisticated use cases for consumers and businesses 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% — according to findings published by ACI Worldwide, a provider of real-time payments software, alongside data and analytics firm GlobalData.
What are the key findings of ACI Worldwide’s report?
According to the 2023 Prime Time for Real-Time report, 511.7B real-time transactions globally are forecast by 2027, representing a 2022-2027 compound annual growth rate (CAGR) of 21.3%. By 2027, RTPs are expected to account for 27.8% of all electronic payments globally.
Noticeably, India remains the undisputed RTP leader, with a staggering 89.5B transactions in 2022 and a YoY growth rate of 76.8%. India accounted for 46% of 2022 global real-time transactions. In addition, Brazil was the third fastest-growing RTP market in 2022, with a YoY growth of 228.9%, and is second in transactions, with 29.2B in 2022 – 15% of global RTPs.
Furthermore, findings in the real-time payments survey report indicated that China, Thailand and South Korea take third, fourth and fifth positions, respectively, on the list of the top real-time payment markets, with 17.6B, 16.4B and 8B transactions, respectively, in 2022.
This year’s Prime Time for Real-Time report analyzes RTP transactions per head of population per month for the first time, highlighting 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, with 83.3 RTP transactions per head per month projected.
Furthermore, consumers in Brazil (#2) and Thailand (#3) are expected to make 51.8 and 43.6 RTP transactions per month, respectively, by 2027. Netherlands, Sweden, Denmark and Finland are forecast among the top 10 for RTP consumer adoption by 2027. The U.K., Canada, the United States, Germany, France and Italy — all top 10 global economies by GDPi — are forecast to place 17th, 19th, 33rd, 34th, 35th and 42nd, respectively, for consumer adoption in 2027.
What are ACI Worldwide’s thoughts on the report?
Craig Ramsey, Global Head of Real-Time Payments and Banking at ACI Worldwide, said, “The report from this year highlights how consumer and business adoption of real-time payments accelerates when the conditions are right. 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,” he continued.
“RTPs are the future of modern, digital economies. Governments and regulators are beginning to understand this and see them as a way to drive economic growth and financial inclusion,” said Thomas Warsop, Interim President and Chief Executive Officer of ACI Worldwide.
He added, “RTPs will help to secure the competitiveness of banks and financial services providers. They remove payment friction, add to greater liquidity and 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. The extent to which they make real-time payments part of their offering is a strategic decision. It seems more clear, however, that limiting their commitment to the minimum also means limiting their potential share of the future payments market,” Warsop ended.
What does this mean for the major regional economies?
With consumers and businesses globally demanding cheaper, faster and more efficient ways to pay and merchant RTP acceptance rising, consumer and business adoption via popular new use cases is heating up. Governments and regulators in other countries are beginning to notice and have launched initiatives to emulate the most successful RTP markets’ success.
In Europe, the European Union Commission has proposed legislation mandating real-time payments across its 27 member states. The U.K. has embarked on its New Payments Architecture program, which attempts to modernize the country’s real-time payments rails.
In the United States, the Federal Reserve recently announced the launch date for its highly anticipated FedNow service to expand real-time payment access in the U.S. — a highly significant event in a market where regulators tend to lean toward non-intervention.
Regional economic implications
- 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 3.9B in 2022 to 13B by 2027, a CAGR of 27.3%. While North America currently accounts for just 2% of all RTPs globally, it has the potential to develop into an extremely high-growth region in the future.
- Europe: Major change is on the horizon with the new European Union real-time payment mandate. RTP transactions in Europe are expected to increase from 13.2B in 2022 to 34.2B by 2027, with a CAGR of 21%. Four European countries feature in the global top 10 for consumer adoption for 2027, namely Netherlands, Sweden, Finland and Denmark.
- LATAM: RTP transactions are expected to grow from 33B in 2022 to 119.5B by 2027, a CAGR of 29.3%. The region is forecast to have one of the highest proportions of RTPs as a portion of electronic payments by 2027 (56%). Brazil has become a major global player in RTPs and is responsible for 90% of RTP volumes in the region due to the strength of PIX.
- APAC: Asia Pacific leads the world in terms of real-time, cross-border initiatives. 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 49.2B in 2022 to 96.7B by 2027, a CAGR of 14.1%
- MEASA: This 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 95.7B RTP transactions in 2022, mainly due to India’s dominant role. RTP transactions are expected to grow to 250B by 2027, a CAGR of 21.2%