Real Time Payments; Who’s leading the way, and should the rest follow?

Real-time B2B payments are surging in popularity globally. It’s estimated that up to half of B2B payments will be made in real-time by 2025, and for good reason. But discrepancies in growth between regions, and barriers to full adoption remain. Azimkhon Askarov, Co-partner of CONCRYT, looks at why we should work to overcome these barriers to unlock the full benefits of RTPs.

Real-time payments (RTPs) are transforming financial transactions for businesses, allowing for the immediate transfer of funds, 24/7, and in doing so, redefining how we move money. But the global RTP landscape is varied and often difficult to navigate, with some regions leading the change and others following somewhat reluctantly behind.

The global RTP landscape

Many countries have now implemented their own real-time payment systems, each with unique characteristics shaped by local regulations, banking infrastructure and the needs of the local economy.

India has been leading the way in global real-time payments adoption, but Brazil seems determined to catch up. In fact, Latin America as a whole is expected to see a nearly fourfold increase in the volume of real-time payments by 2027.

The success of fast-payment systems like Transferencia 3.0 in Argentina, PIX in Brazil, and SPEI in Mexico has led to impressive growth, enabling consumers, workers, and suppliers to operate online, backed by robust payment systems. In fact, the success of PIX in Brazil has inspired neighbouring countries, with Argentina, Bolivia, Mexico, El Salvador, Peru and Costa Rica all rolling out some form of instant payment. Most recently, the Central Bank of Colombia has announced a partnership with ACI Worldwide to power its new domestic real-time payments system which is set for launch in 2025. The system will serve as the base layer for all current and future real-time payment schemes.

Smaller countries like El Salvador, Panama, and Costa Rica are also promoting real-time payments through initiatives like Transfer365, Wallet 2.0, and Sinpe Mobile. Bolivia, too, introduced QR BCB in order to drive QR payments in the country. All this means instant payments are surging by a staggering 55% each year across the region. So, when it works, it works well.

Conversely, the projected CAGR for RTP volume in South Korea and China is expected to remain at single-digit and low double-digit percentages by 2027, and the U.S. doesn’t even rank in the top 10 countries with respect to real-time payment transactions per person per month.

So, what might be holding some geographies back while others soar ahead?

The barriers and benefits of RTP adoption

The geographies leading the way have certain things in common: collaboration and government mandates, strong brand recognition for a scheme, and widespread merchant adoption.

Merchant adoption is undoubtedly hindered by a range of issues, deterred by the increased risk of fraud and cybercrime (RTPs process transactions instantly, leaving little time for banks and payment service providers (PSPs) to detect and prevent fraudulent activities) and regulatory compliance.

Beyond this, implementing RTPs requires a significant investment in technology and infrastructure which many businesses are unwilling to invest in; upgrading systems to handle real-time transactions can be a complex and costly process. But it’s an investment worth making.

RTPs not only enable businesses to receive funds immediately after a transaction is made, significantly improving cash-flow management, they increase efficiency and productivity. The immediacy of RTPs eliminates the need for manual intervention in payment processes, increasing overall operational efficiency. Furthermore, RTPs are not constrained by traditional banking hours, and operate 24/7, allowing businesses to send and receive payments at any time.

RTP systems can also carry more data than traditional payment methods, providing businesses with valuable and actionable insights.

But perhaps most importantly, customers who use RTPs enjoy the convenience of making instant payments anytime, anywhere. This can significantly enhance the customer experience, particularly in sectors such as e-commerce and software-as-a-service (SaaS). When designing real-time payment systems and experiences, payment providers must keep the customer experience front of mind, ensuring it is positive and seamless.

For businesses, the adoption of RTPs presents a real opportunity to optimise cash flow management, simplify administrative processes and create a more seamless customer experience. But to make full use of these benefits, businesses and governments need to take investment in the RTP infrastructure seriously.