Navigating the Global Fast Payment Frontier


Different from ACH payments taking from hours to days to be cleared, fast payments (“FP”, ie near real-time payments) are transactions whose messaging and fund transfer are conducted in near real time (less than 20 seconds, typically) on a 24/7 basis. Instead of long account numbers, transfer can be settled with a mobile number, national ID, or business registration number. As its speed matters to the cashflows of businesses and consumers, FP has been implemented in 70+ markets in 2023 globally, growing from 40+ markets in 2018, almost doubled in five years. The increase has been largely driven by adoption in Europe, Southeast Asia, the Americas, and Middle East and Africa (MEA). For countries such as India, FP (ie Unified Payment Interface (UPI)) also serves as a key tool for driving financial inclusion for unbanked consumers and MSMEs to convert cash into digital FP, with low fees.

Graphic showing Timeline of Implementation of Fast Payment Systems

A closer look at the development in Europe and the Americas

Europe has been at the forefront of global FP development. One of the very first domestic FP systems, Faster Payments, was launched in the UK in 2008. The demand for quick, secure and low-cost electronic transfers has rapidly driven the launch and adoption of the FP solution across the region. National systems supporting FP in Europe include Express Elixir in Poland, which has enabled payments since 2012, Straksclearing in Denmark (launched in 2014), Spain’s Bizum (2016), CERTIS in the Czech Republic (2018), and Hungary’s AFR (since 2020).

Since 2017, the most prominent system of the European FP landscape is SEPA Instant Credit Transfer (SCT Inst), the pan-European instant payment scheme operated by the European Central Bank. Although SCT Inst is aimed to facilitate cross-border payments in the SEPA (Single Euro Payments Area) zone, in many markets it is the single FP system. Therefore, its role in domestic FP should not be underestimated.

Like Europe, the Americas have seen implementation of FP systems over the past decade. In the US, RTP, overseen by The Clearing House, has been used to process FP since 2017. However, in July 2023, the Federal Reserve launched its own FP system, FedNow, entering direct competition with RTP. While the two systems are similar, FedNow also enables P2P transactions, and its transaction limit is significantly lower than that of RTP. Growing competition between the two systems has the potential to positively influence the market and contribute to an acceleration of FP adoption in the US.Chart showing Share of digital consumers using bank account transfer

Enabling FP has become a strategic focus for players in the financial sector. From card networks to financial technology (fintech) firms, investment in such payment solutions is a priority.

For example, ACI Worldwide partnered with Mexipay to promote FP in Mexico in 2023. Most recently, Visa Direct and RevoluPAY joined forces and announced their collaboration to facilitate fast P2P payments via RevoluSEND in Europe. As collaboration is key to promote and implement FP, we expect to see even more partnerships, going forward.

Tracing the progress in Asia Pacific, Australasia, and MEA

China implemented Internet Banking Payment Systems (IBPS) in 2010, operated by China National Clearing Center, largely for interbanking transactions. Permitted by the regulators for market development, Tencent and Ant Group spent huge resources for merchant and consumer acquisition in the 2010s for WeChat Pay and AliPay, outpacing the growth of IBPS. For consumers, Tencent rolled out a product of “WeChat red envelopes” and successfully generated viral effect in the activity of “snatching red envelopes feature” among users in WeChat groups since 2014. For the merchants, in 2019 alone, AliPay announced CNY3 billion (USD400 million) for merchant acquisition on the face scan feature version of AliPay alone, while WeChat followed with CNY10 billion (USD1.5 billion) for the same to compete. Only when WeChat Pay and AliPay established a market duopoly, did regulators establish NetsUnion Clearing Corporation in 2018, tracking all digital wallet transactions.

Other key markets leveraged payment firms (especially Europeans) to establish the systems. Assisted by Euronet, the National Payments Corporation of India (NPCI) rolled out the Immediate Payment Service (IMPS) for interbanking transactions in 2010. Backed by RS Software, NPCI launched UPI in 2016, differentiated with standard interface and UPI ID (a digital ID). With no charge, UPI has achieved tremendous growth, recording 505 participating banks and 11 billion transactions amounting to USD206 billion in October 2023 alone (Source: NPCI).

Backed by success in the UK, Mastercard’s Vocalink supported Singapore and Thailand to launch FAST (and PayNow) in 2017 and PromptPay in 2016, respectively. Meanwhile, ACI Worldwide partnered with PayNet to develop the Retail Payments Platform (RPP) including DuitNow in Malaysia.

In Australasia, SWIFT was chosen by the Reserve Bank of Australia to build NPP (the New Payments Platform). In 2022, the United Arab Emirates appointed Accenture to lead building the Instant Payment Platform (IPP) over 2022-2027, while launching Aani (another FP system jointly developed by Al Etihad Payments and India’s NPCI) in 2023.

Challenges and opportunities

Published in 2004, ISO is an international standard for communicating financial messages. Although ISO20022 has been adopted by more than 80% of the markets as the messaging standard of FP, the remaining markets still run ISO8583 (ie India’s IMPS) or proprietary standards. Those markets may adapt to ISO20022 or develop conversion methods, to improve the interoperability of cross-border FP.

Also, for emerging markets without FP experience, the foundations of national digital IDs have to be built with vendors (ie NEC), besides driving access of smartphones and internet. Digital ID and authentication are critical for onboarding and transactions, to combat fraud, scams and money laundering. For card operators, the threat of the rapidly growing FP is on the growth of issuance and usage of debit cards, especially in emerging markets like India. To turn threat into opportunities, card operators may follow Mastercard’s Vocalink to invest into embedded finance, building the local countries’ FP infrastructure.

With track records, leading firms (Mastercard, Ant Group, NPCI, etc) that can address those challenges with local partnerships are considered with advantages to seize those opportunities. Furthermore, as key central banks globally prioritise the financial inclusion mission, those which can scale at affordable cost while balancing the profitability and security will outshine.

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