Financial research factor S&P Global Market Intelligence has distributed a report on Fintech, pointing at real time payments as an opportunity that is experiencing choppy adoption depending on the jurisdiction.
S&P says that the rollout of FedNow, the US government’s effort to power instant payments and transfers, could drive opportunity for both legacy and newer banking and payments providers, but it lacks a significant catalyst.
At the same time, around two-thirds of banking firms indicate they are very or somewhat likely to consider partnering with a Fintech to provide improved core banking services.
Financial technology research analyst at S&P Global Market Intelligence Sampath Sharma Nariyanuri, says their research indicates that “regulatory nudges” drive bank participation:
“On both counts, FedNow, recently launched by the US Federal Reserve, lacks catalysts for a runaway success and could take time to gain traction. FedNow participants could likely target earned-wage access, gig economy disbursements, insurance payouts and just-in-time payments. Emerging markets, such as India and Brazil, unencumbered by legacy infrastructure, are going beyond peer-to-peer use cases and increasingly capturing payments flows of all kinds. While pervasive availability of traditional payment methods in developed countries creates fewer immediate commercial incentives to migrate, instant payments are cannibalizing checks and older, batch-based interbank payments.”
Nariyanuri says they expect both banks and Fintechs to accelerate their real-time payments abilities, and Fintechs are already there – “innovating at the edge” to create new ways for transfers and payments and to simplify the checkout experience.
In regard to real-time payments, the UK is tops with the amount at $4,018 billion. At the same time, it is third with the number of instant payments per capital at 58. The leader for instant payments per capita is Thailand at 207.
In regard to the total number of real-time payments, India leads with 80 billion.
In India, Brazil, and Southeast Asian countries, the instant payment system is evolving from a bank transfer method into a QR-code-driven acceptance infrastructure for all payment methods, including credit cards and digital wallets.