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In search of the economic benefits of faster and more efficient payments, most major markets either already have real-time payment schemes in place or in development, and attention is turning to driving adoption.
Each of their adoption journeys will be a unique reflection of the make-up of the market’s wider existing payments ecosystem as well as social and cultural factors and the government’s economic objectives. However, as newly released research from ACI shows, there are commonalities when it comes to the market conditions that best support growth.
To illustrate this, ACI’s Inside Real-Time platform, a video-led research project featuring exclusive data from analysts at GlobalData, has thrown a spotlight on three countries — and services — that are transforming the real-time payments landscape: Brazil (PIX), India (UPI) and the Netherlands (iDeal). Of all the markets currently live with real-time payments, the successes of these three markets have the most to tell us about what it takes to drive rapid and high adoption of real-time payments.
Strong central mandates drive real-time success
The research finds that strong government or central mandates are the factors most positively correlated with real-time payments success.
In India, these mandates included a sweeping round of demonetization as part of the government’s vision for greater financial inclusion through digitized payments and the mandated availability of free, zero-balance bank accounts for marginalized sections of society. Such directives have helped propel a historically cash-reliant society to become the world’s largest user of real-time payments by transaction volume.
Financial inclusion was also a factor behind the Central Bank of Brazil’s launch of the PIX system, Latin America’s most used real-time payments scheme and second only to India globally when it comes to transaction volume. The Central Bank of Brazil effectively made digital payments available to the entire banked population when it mandated that all but the very smallest banks and payment service providers make PIX available to their customers.
Meanwhile, regulators and the major banks in the Netherlands, which is a debit card-dominated market, collaborated closely to position real-time account-to-account payments as the new normal in order to accelerate adoption of more efficient payments. Since something “normal” can’t be charged at a premium, it was mandated that instant payments be free of charge for consumers. This was instrumental in driving relatively rapid adoption.
Successful schemes are also mobile first, merchant friendly and open
Other common success factors for real-time payments identified in our research include cut-through consumer use cases, typically delivered via mobile-first user experiences.
In India, mobile penetration reaches into even the most remote parts of this massive country, making mobile wallets the natural choice for UPI’s primary interface. Brazil’s PIX also features an extremely user-friendly QR code scanning mechanism that makes it simple, fast and reliable to send and accept digital transfers and payments by smartphone.
Finally, we also see that openness to new players beyond traditional financial institutions and fostering merchant acceptance are both strongly correlated with high growth and high adoption of real-time payments.
In both India and Brazil, regulators have prioritized opening up the real-time rails to fintechs and big tech players. Allowing a new breed of player into the ecosystem has completely reshaped the payments landscape in both markets, accelerating the introduction of innovative solutions. At the same time, Indian consumers can now purchase almost anything from any merchant of any size simply with their smartphone. Merchants operating on very thin margins are receptive to accepting real-time payments, either through QR codes or mobile numbers, because they’re significantly less expensive than traditional point of sale modes of accepting payments. Brazil’s PIX, having made major inroads into eCommerce, has similar merchant-friendly developments in the pipeline.
What does this mean for your market?
The findings published here are simply a high-level overview of the stories behind the success of three of the world’s biggest or best-adopted real-time and digital payment schemes.
While some or all of these common factors are generally present in successful real-time payment markets, the way in which they come together will always be uniquely influenced by the interplay between the regulatory environment and government (or central bank) policy on one hand, and the strategic decisions of banks, big tech and fintechs on the other.
ACI Acquiring 
Frederique (Fred) Slevin joined ACI in 2006 and is a seasoned payments industry executive with over 25 years of experience spanning across card, account to account and generally digital payments technology solutions for banks, merchants, billers, fintechs and financial intermediaries. In her current role at ACI, Ms. Slevin is VP of Solution Consulting, leading a large team of globally distributed payments experts who advise ACI customers and partners on the technology solutions to adopt in order to achieve business growth, technology modernization, and efficiency gains strategic objectives. In her previous roles at ACI, Ms. Slevin held product management leadership positions across several ACI Solutions, leading the strategy and roadmap investment direction in support of payments evolution. As part of her tenure with ACI, she launched ACI's first Real Time Payments solution in the UK, enabling 75% of the member banks in the country to join the new FPS scheme at the time of its launch. She was also instrumental in enabling universal payments connectivity as part of ACI's Retail Payments portfolio, driving thought leadership and vision to banks and processors looking for a competitive advantage as part of the Retail Payments digital transformation. Prior to Joining ACI, Ms. Slevin held various positions at Accuity (now Lexis Nexis Risk Solutions) in Skokie, IL, United States, where she managed parts of the payments efficiency and fraud prevention product lines. During that time, Ms. Slevin collaborated with North American government security agencies and banks to form payment industry communities & technology solutions to combat financial crime and money laundering. Ms. Slevin lived in the United States, the Republic of Ireland and is now located in France. Her global payments experience contributes unvaluable thought leadership to ACI's business partners.
