COVID-19 highlights need for instant, real-time payments - GlobalData
Real-time payments, where money is digitally deposited into another account instantly, has seen renewed interest as lockdowns continue in countries across the world, according to GlobalData.
The research company revealed in a report released yesterday that more than half a trillion real-time payment transactions will be processed over the next five years.
Other payment types, such as contactless methods like Paywave and digital payments online have also seen large increases globally as cash is discouraged with millions under lockdown.
GlobalData says the restrictions imposed on people as the virus spreads will shape consumer behaviour going forward, as consumers will get into new habits of using digital payment services, which should boost the global Instant Payments (IP) market.
“Real-time payments systems can really help with the disruption caused by COVID-19,” says GlobalData lead analyst Sam Murrant.
“The ability to send money to a contact and have them be able to use it right away presents a powerful tool for families and communities to support each other through the present hardship.
“In the longer term, once the user bases are in place, these systems will also be able to leverage their speed and efficiency to move out of P2P and into the consumer-to-business space.”
Centrally driven payments market initiatives are a significant factor for IP adoption, making it a strategic imperative for banks and companies in the market.
Real-time payment adoption will vary by country depending on end goals, whether they be better financial inclusion, cross-border commerce or speeding up the shift to a cashless economy.
The widespread reluctance to use cash and preference for contactless payments during the pandemic will likely accelerate adoption, says GlobalData.
The report also forecasts a payment volume compound annual growth rate of 23.4% from 2019 to 2024 across the 30 global markets analysed.
“India is poised to lead the world in real-time payments over the next five years, with transaction volumes set to grow from 15.3 billion in 2019 to 52.8 billion in 2024,” says Murrant.
“India is already considered to be a world leader in IP, having launched its Immediate Payment Service in 2010 and since built on it with the highly successful overlay service UPI.
“Real-time payments have huge disruptive potential for payments – these systems won’t just be dominating P2P and bill payments in the years to come,” says Murrant.
“We’ll be using these systems to pay online and ultimately at the point of sale too.”