In 2021, real-time payments resulted in £730mn in cost savings for firms and consumers in the UK – helping unlock £2.2bn in additional economic output, equivalent to 0.1% of formal GDP.

The findings come as the IMF has forecast the UK will have the slowest growth out of the G7 nations in 2023, amid reports half of small British companies say rising costs will hit their growth.

Real-time payments are a big lever governments can pull to improve liquidity in financial systems, enable quicker payment of workers and suppliers, and drive economic growth. Globally, in 2021, real-time payments helped to generate additional GDP amounting to £59.9bn across 30 key economies – forecast to climb to £133bn by 2026.

The report, also in partnership with GlobalData, finds the UK is missing a trick. Emerging economies outpace developed nations in real-time payments modernisation, boosting global economic growth.

Report Highlights:
• Emerging economies are outpacing developed nations when it comes to real-time growth and the associated economic benefits. In 2021, 92.9 billion real-time payments were made across the five top real-time payments markets - India, China, Thailand, Brazil and South Korea – forecast to grow to 356.9 billion by 2026. The combined real-time volume helped facilitate £41.9 billion of additional economic output across these countries in 2021 – forecast to climb to £100,7 billion in 2026.
• Leading developed countries, including the US, Canada, UK, France, and Germany, lag and are losing out on economic growth – 7.5 billion real-time payments were made across these countries in 2021, forecast to grow 20.9 billion by 2026 – helping to facilitate £5.6 billion of additional economic output in 2021 – forecast to rise to £11 billion in 2026.
• Real-time payments accounted for 13.8% of total global electronic payments in 2021 - forecast to rise to 25.6% in 2026. In the Middle East, Africa, and South Asia, real-time payments are forecast to account for 80% of all electronic payments by 2026, while the EU’s and US’ trajectories sit at 12.7%and 4.7%, respectively.

“By allowing for the transfer of money between parties within seconds rather than days, real-time payments improve overall market efficiencies in the economy,” commented Owen Good, Head of Advisory, Centre for Economics and Business Research. “Real-time payments improve liquidity in the financial system and therefore act as a catalyst for economic growth. This is especially important for our fast-paced and digital-led gig economies. Workers are paid quickly, allowing them to better plan their finances. And businesses can be more flexible and reduce the need for burdensome cashflow management.”

“As our research reveals, modern economies depend on real-time payments to boost economic growth, prosperity and financial inclusion, with central governments worldwide being the primary enabler of these systems,” commented Odilon Almeida, President and CEO, ACI Worldwide. “The challenge for financial institutions worldwide is to leverage the new payment rails and maximize their value for the benefit of their customers. Banks must reinvent their mission-critical operating systems to compete in the new real-time, cloud-first and data-centric business environment. Inaction is not an option as broad-based disruption of the sector has moved beyond a tipping point.”

“One of the big themes in this year’s report is the cloud as the great enabler of real-time success and new, differentiated payments experiences,” commented Jeremy Wilmot, Chief Product Officer, ACI Worldwide. “As an industry, we are still only scratching the surface of the cloud’s potential. As other industries have already shown, and as this report confirms, it is increasingly clear that banks and financial institutions with designs on winning with payments in the digital real-time economy need to be cloud first and data centric.”

“Developing nations continue to drive the majority of volume gains, confirming the industry trend of the strongest growth coming from economies with minimal existing electronic payments infrastructure, and therefore heavier reliance on cash,” said Sam Murrant, Lead Analyst, GlobalData. “Amid all this activity, mobile in multiple forms will be pivotal in shaping the trajectory of real-time payments for developing markets, India provides the template for mobile wallet integration with underlying real-time payment systems. Mobile will still be the leading form factor in Western markets, although we may see banks’ involvement sitting more behind wallets.”