Global Instant Payment Market 2023-2030

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    GLOBAL INSTANT PAYMENT MARKET

     

    KEY FINDINGS

    • The global adoption rate of instant payment is increasing and considerably fuelled by covid19 pandemic.
    • UK, India, Australia are the fastest growing regions, whereas US is slightly lagged behind. The initiatives by governments have great significance in the growth of this market.
    • Major players of the market are Wirecard, Mastercard, Paypal, ACI Worldwide, Apple, Ant financial, Visa.
    • Increased collaboration between banks and fintech bringing innovative and user-friendly technology and attracting thousands of millennials.
    • FedNow by Federal Reserve is expected to create another massive transformation and is all set to launch in 2023-2024.

     

    INTRODUCTION

     

    Instant Payment market is a mode of exchanging money and processing payments; they immediately transfer money between the bank accounts.

     

    The adoption rate of instant payment is high, though this platform is currently under developed, across the globe. Instant payment market has become a market for customers and businesses, especially after the growth of e-commerce and changed the spending pattern of people.

     

     

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    In 2017, Walmart started instant payments to its employees with the help of digital application.

     

    In 2018, Postmates partnered with Visa and introduced ‘Instant Deposits’, which basically enabled real-time payments to Postmates fleet across U.S.

     

    Digital wallets are often confused with instant payments, however, the difference lies in the settlement time, where the former transfer funds in the next business day and the latter transfer within seconds or minutes.

     

    INSTANT PAYMENT MARKET DYNAMICS

     

    Several companies are adopting Instant Payments, for example, AscendentFX Capital recently joined the SWIFT network’s Global Payment initiative to improve payment delivery and provide greater transparency for customers, Revolut has launched real-time payment service in Europe and Mastercard partnered with startup, Transferwise that will allow to issue Transferwise debit cards in any location where these two companies operate.

     

    Government of countries like India, U.K. and the U.S are promoting digital transactions while collaborating with various stakeholders such as banks, state government and governmental departments.

     

    Asia-Pacific is expected to hold largest market size of the RTP market due to the growth factors such as adoption of advanced technologies, economic developments, digitalization, high investment in RTP solution and service providers.

     

    In 2018, the cashless transactions reached more than 500 billion as the growing demand of net and mobile banking. The Instant payment market has gained from the growing popularity of FinTech Services such as Google Pay, Samsung Pay, Apple Pay, etc.

     

    Collaboration of the instant payment services with the regional banks are rising and bringing innovations in the market like provision of quick loans and cashless payments.

     

    The growth can be hindered from the issues like cybersecurity concerns and interoperability issues among the RTP network schemes such as The Clearing House (TCH) and Society for Worldwide Interbank Financial Telecommunications (SWIFT).

     

    INSTANT PAYMENT MARKET TRENDS

     

    In November 2017, The Clearing House brought real-time payments to the U.S. by launching its RTP.

     

    According to The Clearing House’s website, the RTP network currently connects over 50% of all demand deposit accounts, such as checking accounts in the U.S., and is expected to reach nearly all U.S. accounts in 2020.

     

    Faster Payments Service in the UK, UPI in India, NPP in Australia, and TCH-RTP in the US are live examples of Real Time Payments globally and some of these regions have witnessed a meteoric growth.

     

    In the last year of 2020, financial institutions have turned to digital technology to deliver the value of Real-Time Payments.

     

    In 2019, Apple debuted a credit card created in partnership with Goldman Sachs. Google plans on launching a consumer bank account in collaboration with Citibank because they are interested in sitting on top of their financial infrastructure and expertise with their Google Pay technology.

     

    It is likely that big tech companies will concentrate on preserving client relationships, experience and capturing more consumer interaction, browsing and purchasing actions, but will remain a seller, effectively leaving the payment market to financial institutions.

     

    FedNow is another real-time payment and settlement service created by the Federal Reserve Bank that will incorporate clearing functionality into the process of settling payments. FedNow is expected to go live in 2023 or 2024.

     

    ROLE OF GOVT POLICIES

     

    The U.S. lags behind much of the world in this regard; dozens of developed and developing nations around the world—including the likes of the U.K., India, Poland, Mexico, and Nigeria—already operate their own real-time payments infrastructures. RTP remains far from universally adopted.

     

    While many banks and non-bank payment services (like PayPal and Square) already offer instant payments and transfers through The Clearing House’s RTP network, such services often come with additional fees.

     

    The Fed believes FedNow Service would stimulate “healthy competition” in the real-time payments space, and result in “efficiencies related to pricing, service quality, and innovation.”

     

    The Faster Payments system is a 24/7 real-time payment system and has been great UK success story. Pay.UK (the payment system operator for Faster Payments, Bacs and cheques) is planning to deliver a streamlined and modernised New Payments Architecture for the UK.

     

    Over the last few years, the National Payments Corporation of India (NPCI) has been successful in democratising digital payments, especially with the launch of UPI, and the Reserve Bank of India (RBI) has now invited private parties to form a new pan-Indian umbrella for retail payment systems.

     

    Now, India has emerged as the global leader in real-time payments, handling 41 million transactions per day.

     

    INSTANT PAYMENT MARKET SIZE AND FORECAST

     

    The key drivers of this market are increasing usage of smartphones across the globe and growing demand of the quick money transfers in consumers and businesses.

     

    There is high adoption among the e-commerce retailers and retail store owners as the solutions provided by RTP are helping them to enhance the operational efficiency, customer engagement, data accuracy and improved transparency.  

     

    The global instant payment market size is estimated at $XX Billion in 2021 growing at –% CAGR till 2026

     

    NEW PRODUCT LAUNCH

     

    The Federal Reserve launched its FedNow instant payment service after years of research and development, which officials claim will speed up the flow of funds for both businesses and consumers.

     

    The system is anticipated to enhance the movement of money across the American economy, whether it is by enabling last-minute bill payments, rapid access to paychecks, or sending government payouts to individuals.

     

    In order to make regular payments faster and more convenient in the coming years, the Federal Reserve established the FedNow Service.

     

    The advantages to people and businesses will grow over time as more banks decide to use this new tool.

     

    For example, a person will be able to receive their paycheck right away, and a business will be able to access funds right away when an invoice is paid.

     

    Additionally, 16 organisations offer services to banks and credit unions. The American Bankers Association expressed its support for the FedNow developments, adding that there are now two important players in the market, with the central bank joining the Clearing House, which just launched its payments business online.

     

    They will keep informing members about the two systems and the advantages they provide for customers and companies.

     

    Regarding FedNow, there are still several unanswered uncertainties, such as whether banks will charge a fee for the service.

     

    The technology is expected to be linked into bank and credit union websites and apps when it is further developed, according to the central bank.

     

    ACI Worldwide, a leader in mission-critical, real-time payments software, announced the launch of ACI Instant Pay in Europe and the United Kingdom.

     

    This real-time payments solution enables merchants to accept immediate online, mobile, and in-store payments via a straightforward API integration with ACI Payments Orchestration Platform.

     

    A push for regulation in Europe serves as the backdrop for the action.

     

    Banks in the Eurozone must abide by a proposed rule from the European Commission that requires financial institutions in all SEPA member states to provide instant payments under the SEPA Instant Credit Transfer programme at the same cost or a lower rate than conventional credit transfers.

     

    The goal of the new rule is to enable rapid payments to benefit European economies.

     

    Through the New Payments Architecture programme, the United Kingdom has also started the process of modernising its Faster Payments system.

     

    Due to the advantages quick payments offer for businesses and customers, more retailers are anticipated to accept them.

     

    In a society that is becoming more and more digital, payments must keep up. Currently, 74% of individuals in Europe between the ages of 16 and 74 use the internet to make purchases or place orders.

     

    Giving and receiving money electronically should be just as quick as handing over cash in the rapidly expanding “always on” transactional world.

     

    ACI, a longtime supporter of rapid payments, is prepared to assist European merchants and their consumers in taking advantage of the potential presented by quick payments in the U.K. and Europe.

     

    COMPETITIVE ANALYSIS

     

    Wirecard: It is one of the leading service provider in the online banking services. The company provides product and services like software enabled payment solutions and real time payment solutions to companies in the Instant Payment market. Wirecard followed strategies such as new product launches, partnerships, business expansion and acquisitions to keep a stable growth in the payment industry. For example, in 2018, the company partnered with SAP to launch Wirecard Extension for SAP Commerce.

     

    Financials

    Market Cap: Rs. 74.992 Million

    Gross Sales: Euro 748 Million (Q2, 2020)

    Total Income: Euro 146 Million (Q2, 2020)

     

    Mastercard: The company is a leading FinTech company and significantly investing in the real-time account payments, digital services, geographic expansion and data analytics.

     

    In 2016, the company acquired VocaLink Holdings Limited for $ 920 Million and this acquisition has helped the company to become active participant in the electronic payments. It has strengthened its product portfolio with new product launches such as Mastercard Track, a B2B Platform powered by Microsoft Azure.

     

    Financials

    Market Cap:  $ 294.48 Billion

    Gross Sales: $ 3,335 Million (Q2, 2020)

    Total Income: $ 1,420 (Q2, 2020)

     

    PayPal: The company is a technology platform and digital payment provider to the consumers and businesses. The payment solutions include PayPal Credit, Braintree, Xoom and Paydiant products.

     

    It allows to connect the financial institutions around the world and allow consumers to make purchases using a range of payment methods across cross-borders.

     

    Financials

    Market Cap: $ 210.97 Billion

    Gross Sales: $ 4.38 Billion (Q2, 2020)

    Total Income: $ 1.53 Billion (Q2, 2020)

     

    CONCLUSION

     

    The Instant payment market is growing constantly and Real-time payment is one of the leading services which is growing in the market.

     

    The key drivers are increasing smartphones, rising ecommerce industry and growing demand of efficient payment system.

     

    Geographically, the Asia Pacific market is estimated to lead the market size and high growth in the forecasted period 2020-2025.

     

    Government in several countries are promoting digital payments and collaborating with various stakeholders. Risk of cybersecurity and interoperability issues are anticipated as the hindrance of the growth of the Instant Payment market for the period 2020-2025.

     

    COMPANIES PROFILED

     

    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in theIndustry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2023-2030
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2023-2030
    19 Market Segmentation, Dynamics and Forecast by Application, 2023-2030
    20 Market Segmentation, Dynamics and Forecast by End use, 2023-2030
    21 Product installation rate by OEM, 2023
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2023
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix
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