Revealed: The Stories Behind the Success of World’s Leading Real-Time Payments Schemes

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.

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.

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.

Decision makers at these organizations looking to better understand how to drive real-time payments adoption in their market should head to Inside Real-Time and watch the exclusive series ‘Real-World Success With Real-Time Payments’, for additional insights and expert commentary.