Thursday, May 23, 2024

    Instant payment transactions to surpass $58trn globally by 2028, competing with card payments

    Instant payments through wallet apps and open banking could surpass card payments by 2028, as they are more convenient for users and much cheaper for merchants, says Juniper Research study

    The instant payments market – where funds are received in 10 seconds or under and confirmation of the payment to the parties is available in one minute – is set to grow by 161%, up from $22trn in 2024, between now and 2028, as open banking, and account to account services see many consumer bypassing card payments entirely.

    According to a new study by Juniper Research, wallets such as iDEAL and Twint, along with the rising popularity of Open Banking, will enable transactions to be made directly from bank accounts, bypassing the card entirely and reducing costs for merchants and complexity for users.

    An extract from the new report, Global Instant Payments Market 2024-2028, is now available as a free download

    Open banking boosting instant consumer payments

    Open Banking allows digital wallets to leverage bank payments without requiring partnerships with individual banks; boosting access significantly. The report forecasts the ability to quickly and securely access bank accounts through Open Banking, alongside bank-backed A2A wallets, will increase consumer instant payment transaction volume from 252 billion in 2024, to over 600 billion by 2028.

    A2A wallets are popular for peer-to-peer transfers, often used for informal lending and repayments to friends and family. The report identifies features such as splitting payments between multiple users as a key driver of their popularity.

    Additionally, the report recognised the need for greater merchant acceptance of bank payments, both at physical checkouts and eCommerce, as the pressing hurdle to greater consumer adoption.

    Report author Michael Greenwood says: “To increase adoption, we recommend merchants incentivise consumer use by offering purchase discounts when using bank-linked payments. By encouraging adoption, merchants will benefit from lower fees for each transaction in comparison to cards.”

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