As a child, I remember my father carrying a briefcase with papers when he went to work. Over the last two decades, we have shifted to laptops, mobiles and tablets. Feels like just yesterday, when we used to make sure to take our wallets or purses when we left the house. Today, it is just the phone that we need. Real time payments (RTP) have reduced any need to carry cash when we leave home. This is a significant transformation that we are seeing across the globe. A quick view on leading Asian RTP implementations and where growth and transformation are projected.
What are Real-time payments?
RTP are payments that are initiated and settled almost instantly within a matter of seconds. As the name suggests, these payments are processed in real time, allowing them to function 24*7*365 with no date-time restrictions. Real-time payments networks operate on a digital infrastructure, fueled by speed, data, and technology. It enables immediate transactions for businesses and consumers and allows them to scale with low/no operating cost.
Real-time payments – A global picture
It is estimated that RTP networks are operational in 56 countries. Just below one-third of the nations worldwide have implemented RTP. Pandemic has accelerated the growth in RTP, producing a 41% increase in the number of transactions from 50bn in 2019 to 70bn in 2020. RTP transactions in terms of value are estimated to be $92tn in 2020, witnessing a rise of 32% from 2019, where they were $69tn.
India along with China and South Korea holds the top spot in the most number of RTP transactions. The United States witnessed 1.2bn transactions in 2020. Even though the US lagged in embarking on its real-time payments journey compared to other nations, it seemed to be growing rapidly.
Countries like Croatia, Canada, Peru, Indonesia, New Zealand, and a few others are expected to grow RTP and offer instant payment services over the course of five years.
Growth of Real time payments in Asia
Asia Pacific has seen accelerated growth in RTP. India witnessed 41Mn real time transactions per day by volume, positioning it as a global leader, closely followed by China at 38Mn. India’s digital ecosystem is driven by PayTM, PhonePe, GPay, RazorPay and many more consumer trusted players. South Korea saw around 12Mn real-time transactions per day making up the global top three.
In terms of growth, in value transacted over RTP, the Philippines skyrocketed five-folds as compared to 2019, showcasing a growth of 482% in growth by value. The Philippines e-payment market is led by players like GrabPay, Coins.ph etc. The top three APAC countries were completed by Australia making a 231% increase in value and is closely trailed by India at 181% increase in RTP by value as compared to 2019.
Currently, there are 13 APAC countries that process real time payments, with Vietnam being the latest addition to this list.
Malaysia, Singapore and Thailand have embarked on their RTP journey and are reported to achieve interoperability between their central payment infrastructures and facilitate immediate multi-currency settlement. This will be a huge step forward in the RTP space. Studies suggest that almost 30% of consumers in Southeast Asia have shifted from traditional payment methods amidst the Covid19 pandemic and are opting to real-time payments more frequently compared to pre-covid times.
Threats in Real-time payments
The revolution in the payments sector has helped fraudsters hide and leverage the anonymity of the digital world. Data breaches, account takeover, dark web etc. have enabled fraudsters to execute smarter attacks.
Drona Pay helps financial institutions defend themselves against fraudsters. Drona Pay delivers real time protection using machine learning models, to defend institutions against ever increasing frauds in payments, lending & digital assets. Reach out to us for real time risk scoring solutions at www.dronapay.com
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